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Page 1: Contents | Zoom in | Zoom out Search Issue | Next PageFor ... · off some great regional conferences in Philly; Bethesda, Md. (D.C. beltway); and Kansas City, Mo. We’re chillaxing

Contents | Zoom in | Zoom out Search Issue | Next PageFor navigation instructions please click here

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Our clients depend on SBA to provide the wireless infrastructure that allows them to transmit the signal to their customers. As their first choice provider of wireless infrastructure solutions, we are continuously setting the standard for customer satisfaction by “Building Better Wireless.”

800.487.SITE | sbasite.com

© 2012 SBA Communications Corporation. All Rights Reserved. The SBA logo, Your Signal Starts Here, Building Better Wireless and SBA Sites

are all registered trademarks owned by SBA Telecommunications, Inc. and affiliated SBA companies.

with our app SBA Sites® for the iPhone®, iPad®, Windows® 7 and Android®.

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Combine your strengths.Telewave transmitter combiners save valuable tower space and eliminate interference with proven technology. As many as 14 transmitters can share the same antenna system, and dual-band confi gurations such as 700 / 800 MHz can be provided. Hybrid combining techniques allow very close channel spacing, even adjacent channels if required.

Telewave combiners are custom-built on any frequency between 30 MHz and 960 MHz, and are compatible with any narrow or wideband, analog or digital air interface including P25 Phase I and II. Duplexers, receiver multicouplers, preselectors, and power monitors can all share the same rack.

Contact Telewave today for more information about our full line of wireless infrastructure products, designed and manufactured in the USA.

San Jose, CA • 1-800-331-3396 • www.telewave.com

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LOUD AND CLEARFOR 40 YEARS

19722012

1972197220122012 MADE IN USA

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July/August 2012 Vol. 9, No. 7 contents

Features20 Appeals Court Overturns OSHA Citations By Mark A. Lies II and Craig B. Simonsen

22 Venn and the Art of Wireless Regulation By Lisa Murphy

26 Data Down Under: Wireless Voice and Data Come to New York Subways

By Ernest Worthman

34 LTE and the Future of Wireless SystemsFrom a presentation by John Celentano

38 Understanding Load Factor Implications for Specifying On-site Generators

By Brandon Kraemer

44 AGL Tower of the Month

Tower Market Report46 Operating and Financial Trends

From a presentation by Jonathan Atkin

54 Show Me the Money: How Much Is My Tower Worth?By the AGL Staff

64 Trends and Forecasts for the Wireless and Tower IndustriesBy R. Clayton Funk and Jason Nicolay

74 AGL 2012 Tower Market Analysis and SurveyBy Jim Fryer

3

on the coverMetropolitan Transit Authority patrons will receive wireless communications service in six subway stations, thanks to a pilot program expected to lead to service at all 271 stations by 2015. See Ernest Worthman’s article on page 26.

Cover design and Tower of the Month photo by Scott Dolash

15

AGL (Above Ground Level) is published 11 times a year by Biby Publishing LLC, P.O. Box 2090, Ashburn, VA 20146-2090, and is mailed free to qualifi ed individuals in the United States of America.

POSTMASTER: Send address change to AGLCirculation Department, 28591 Craig Ave., Menifee, CA 92584

Departments 4 Editorial Comment — The DAS of 1922

By Don Bishop

6 Publisher’s Note By Richard P. Biby, P.E.

8 Risky Business — Summer Driving TipsBy David Saul, AAI

15 Questions and Answers15 Opportunities Grow for Tower Investments

18 Distributed Antenna Systems

84 Product Showcase — Site Security Systems and Equipment

86 Advertisers Index

86 Professional Directory

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above ground level www.agl-mag.com4

editorial comment

In 1922, the publisher and editor of Radio News, Hugo Gernsback, wrote about a new activity: radio broadcasting.

Some were speculating that broadcasting was only a fad. Whether a fad or not, radio broadcasting showed the rapid growth in 1922 that would today be called “hockey stick,” the shape of a line graph that shows sudden change from slow growth to rapidly accelerat-ing growth.

The 1922 radio receiv-ers were tricky devices that weren’t easy to use. Listeners installed lengthy wires for antennas or sometimes wound wire into large loops. Tiny antennas enclosed within the radios had not been developed or were not in common use.

Gernsback reported that large Eastern hotels were looking into the possibility of installing loop antennas into guest room walls. Guests with their own radios then could plug them into the antennas. The guests would have the convenience of listening to broadcasts while away from home.

That sounds much like the distrib-uted antennas of today, although at a much more crude, but nonetheless practical, level. Distributed antenna system (DAS) networks began to see rapidly accelerating growth rapidly accelerating growth 18 months to two years ago, as has been noted by speakers at industry conferences. Whether DAS shows hockey-stick growth or not, DAS has entered into mainstream deployment, just as radio broadcasting did.

Entertainment venues, shopping centers, offi ce buildings and hotels benefi t from the wireless communica-tions that DAS brings. It’s often said that there is nothing new under the sun, and it is interesting to see that DAS has an ancestor from 90 years ago when hotels looked for ways to help guests access the wireless sig-nals of their era.

Manufacturers continue to seek ways to make receiving antennas smaller, just as they did in the 1920s. Speaking at the New York State Wireless Association Trade Show and Conference, Mark Pecen said that Research in Motion is looking into using barium strontium titanate vari-able capacitors to allow smartphones that now cover six frequency bands to use as many as 15 frequency bands without hav-ing a larger form factor. The capacitors alter antennas’ resonant frequencies and impedance matches. Pecen is the com-pany’s senior vice president of research and development.

I don’t know whether many ideas for modern technology can be found among examples of equipment from the 1920s and earlier, but the equipment is fun to see. Ron Frisbie’s Marconi Museum in Akron, Ohio, the Electronic Communi-cation Museum in Bloomfi eld, N.Y., the Hammond Museum of Radio in Guelph, Ontario, and the Spark Museum of Elec-trical Invention in Bellingham, Wash., have splendid displays.

By Don Bishop, Executive [email protected]

The DAS of 1922

Infrastructure, regulatory and fi nancial information for the antenna-siting community

PUBLISHER/CEORichard P. Biby, P.E.(703) 910-5055; [email protected]

EXEC. EDITOR/ASSOC. PUBLISHERDon Bishop(913) 322-4569; [email protected]

CONTRIBUTING EDITORJ. Sharpe Smith(515) 279-2282; [email protected]

ART DIRECTORScott Dolash(913) 961-7501; [email protected]

ADVERTISING MANAGERSMercy Contreras(303) 988-3515; [email protected] Cook(951) 301-5769; [email protected] Carlile(484) 453-8126; [email protected]

CIRCULATION MANAGER(951) 301-5769; [email protected]

CORPORATE OFFICEBiby Publishing LLCP.O. Box 2090Ashburn, VA 20146-2090(703) 910-5055

PRESS RELEASES andADVERTISING [email protected]

STATE WIRELESS ASSOCIATION NEWSSend updates about state wireless association meetings, golf tournaments, fundraisers and other events to: [email protected]

SUBSCRIPTION INFORMATION: AGL(Above Ground Level) is mailed free to qualifi ed persons in the United States working in the antenna-siting industry and related services.To subscribe online, go to:http://www.agl-mag.com/subscribe.htmlTo subscribe by mail:AGL Circulation Department28591 Craig Ave.Menifee, CA 92584

COPYRIGHT ©2012 Biby Publishing LLCALL RIGHTS RESERVED

www.agl-mag.com

™Hugo Gernsback, shown watching a televi-sion in 1928, six years after writing about antennas for hotel guest rooms.

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above ground level www.agl-mag.com6

relevant and important to you. About those other responsibilities I

mentioned. I’m working on a small-site network deployment in New England. It involves attaching macro sites to telephone poles. It is essentially a DAS network, but without the fi ber.

I was fortunate enough to be directly involved with the industry as it was beginning from about 1983 until I sort of retired in 2005. Twenty-two years of experience gave us plenty of things to write about at AGL. However, things are changing, and I could fi gure no better way to hop back in and get a ringside seat at the next major change in the antenna siting industry than to go out and do it. I’ll be writing more about my new direction in the future.

What about AGL? Nothing is chang-ing. For many years, the magazine has been relying on the great talents of people other than me, and it is doing just fi ne. I remain involved, help set the direction of each issue and identify the important topics. Really, nothing is changing with AGL.

Keep in touch.

publisher’s note

Ah, the excitement of the summer. As a parent of young(ish) kids, my work schedule tracks well with the little people. Finish up all kinds of projects in May and June and chillax (a new word I learned from them) as much

of the summer as you can. I used to be able to do that as a semi-self-employed person, but having taken on addi-tional responsibilities recently, I can’t quite chillax as much as I did in previous years. How-ever, AGL got a lot done this spring. We kicked off some great regional

conferences in Philly; Bethesda, Md. (D.C. beltway); and Kansas City, Mo. We’re chillaxing with our sum-mer combined July/August issue and planning for a busy fall. August puts us in Seattle, and the late fall puts us in Detroit and Dallas. And, of course, Orlando, Fla., in October.

Some highlights: We’ve been work-ing on our website for some time. We’ve had a few false starts (what small busi-ness hasn’t?), however, we’re totally jazzed about our new site (www.agl-mag.com). We’ve gone with a system that lets the content be a good bit more dynamic and more real-time. We’ve added brief interviews that we’ve been conducting at our conferences. We’ve added discussion areas and the ability to bring the magazine, email newsletters and other content together, and most important, we made it searchable.

Check out the Jake MacLeod inter-view. I think it’s great. And yes, I’m the guy off camera asking the questions. Head over and give it a look. I think the interviews are some of the most impressive I’ve seen in the industry. But I am biased.

On the topic of social media, we’re very happy with the ongoing dialog on

LinkedIn. The nice thing about LinkedIn is that you don’t have to go to another site, taking time and introducing ads. It’s also a little more sociable. Anyone can pretty much say anything and keep the conversation honest. Yes, if someone is selling Viagra, we can delete the post-ing, but pretty much unless something is over the top or just wrong, we don’t fi lter anything. And honestly, we have not needed or wanted to.

Just to let you know, if you are not a member of LinkedIn, it’s a great pro-fessional alternative to Facebook. It’s all about who you know and who you have worked with. It’s more of a resume verifi cation and name game site than anything else. It has a variety of discus-sion groups for companies like AGL, and it’s a pretty effective communications tool. I’m a big fan.

Keep ’em comingEmails are always a great way to be

in touch and help us fi gure out what we are doing right and wrong. We enjoy the dialog, and emails often help us redirect our energy into things that are current,

Summer Break

By Rich Biby, [email protected]

Picture of the Month

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8 above ground level www.agl-mag.com

risky business

Hitting the road for a sunny driving vacation can be one of the greatest get-aways of all time, and with opportunities to head out on family holidays and road trips, and some warm weather for cruis-ing down the freeway, the summer holds

plenty of appeal for motorists. However, there are precautions you should take to keep yourself, your vehicle and your traveling companions safe and sound during a hot-weather road trip. Here are some.

Tire pressure: Hot air can wreak havoc on your ve-

hicle’s tires, causing them to expand, which can have severe consequences while you’re driving, because over-infl ated tires reduce the tread contact your tires have with the road. The key is to check your tire pressure on a regu-lar basis — as often as once a month, to ensure that your tires are at a safe level for the conditions. Remember to wait until your tires are cold before changing the pressure.

Car fl uids: Because all that summer heat is likely to have adverse effects on

your vehicle’s cooling system, you’ll want to keep a close eye on your radiator during the summer months. Make sure that both coolant and water levels are regularly topped up, and that you check the radiator for any leaks or indication of corrosion. Any problems here could sug-gest that your radiator is about to fail.

Personal fl uids: Stock up with more drinking water than you think you’ll ever need. It’s better to end up with some left over after your trip than end up stranded without any.

Traveling companion: Travel with a companion, preferably someone you know well and trust. You’re less likely to be the victim of crime when not trav-eling solo, for one thing, and it’s also easier to stay alert while driving when you have someone to chat with.

Non-traveling companions: Be in-credibly prudent about picking up hitch-hikers or even in assisting someone in apparent hardship. It’s better to call the police to assist someone with a fl at tire than risk your own safety by assuming they aren’t a threat.

Road rage: Keep your cool, fi gurative-ly speaking, in the event of potential road rage scenarios, which are more prevalent during summertime when more people are on the road and heat can lead to agitation.

Summer Driving Tips

You never know who might be armed, and there’s no point in risking your neck over someone cutting you off in traffi c.

Driving alert: Make sure you’re always fully alert when driving during the summer, when it’s easy to let the heat melt you into a stupor. Get a good night’s sleep, keep the A/C on as much as possible, eat healthy foods and take turns driving if you’re in a group.

Handling fl ooding: In some areas of the country, such as Arizona dur-ing its monsoon season, the summer months don’t just bring sun but also a substantial risk of fl ash fl ooding. If you’re driving in an area where this has occurred, remember to be careful about heading into side streets where water is rising, because it’s easy to become trapped by flooding. Also, check that your vehicle is equipped to handle wet weather driving; for example, ensure that your windshield wipers are in working order.

Interior overheating: Not only do vehicles heat up on summer journeys, but also the people and pets inside them will too as the interior gets warmer. This presents a danger of dehydration, so make sure you have some drinks — especially bottles of water — stored away in an insulated container. Also,

By David Saul, AAI

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fast-forward.

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o and all other AT&T marks contained herein are trademarks of AT&T Intellectual Propert©2011 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T log

y and/or AT&T affiliated companies.

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10 above ground level www.agl-mag.com

risky business

driving in hot weather can make you feel drowsy, so you might want to consider making regular stops to avoid falling asleep at the wheel.

Safety: It’s always important to keep a well-charged cell phone handy and make sure you’re signed up with a road-side assistance/towing company. If you do break down in the middle of nowhere, your well-being could depend on a good

cell phone and roadside help.Keeping the children entertained:

Setting off on this family vacation with the kids can be a daunting prospect if you don’t prepare well. Children may soon begin to whine, argue with their siblings, and generally make everyone else in the car miserable if they have nothing to keep them busy during the trip. If you’re about to take the kids on

a cross-country car trip, you need to pack appropriate items to keep them happy as you travel down the highway. Try these tips to make your family road trips a pleasant experience.

Purchase travel-sized games for your kids. Most discount stores sell smaller versions of popu-lar games so that kids can play them on the road. Whether your children like to play games like checkers or Memory, you should be able to fi nd reasonably priced travel games that will keep them occupied during a long road trip.

Go to a dollar store to buy some cheap coloring books and cray-ons. Most kids love to color, and they’ll happily scribble away as you drive in relative peace and quiet. If you have older children, consider purchasing word searches, activity books and crossword puzzles.

Check out books on CDs or tapes from the public library. You can fi nd popular titles that will keep your kids enthralled as the miles fl y by. Whether they like spooky stories or funny ones, you should be able to fi nd an interesting audio book that will keep your kids quiet as they sit in the back seat.

Purchase a portable DVD player and check out some free DVDs from the public library. Portable DVD players are relatively inex-pensive, and they can be found in discount stores like Wal-Mart. The kiddies can watch their favorite fl icks, allowing you to drive with-out too many distractions.

Pack healthy snacks for the trip. Kids can munch on nuts, pretzels and fruit to keep them happy. Bring along plenty of bottled water so you don’t have to rely on sugary soft drinks.

Have a safe and enjoyable summer!

David Saul is executive vice president of Atlan-tic Risk Management, Columbia, Md., and is an accredited risk advisor in insurance (AAI). His email address is [email protected].

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Noon – 6 p.m. Registration1 – 5 p.m. Exhibitor Setup11 a.m. Bus Departs Wynn Las Vegas for golf course12:30 p.m. Golf Tournament Shotgun Start7 – 8 p.m. Chairman’s Reception8 – 10 p.m. RCA Gala Dinner - Celebrating 20 Years of Competitive Carriers

7 a.m. – 5:30 p.m. Registration9 a.m. – 4 p.m. Exhibitor Set-up9:30 – 11:45 a.m. Pre-Conference SeminarsNoon – 12:30 p.m. Box Lunch12:45 – 3:30 p.m. Pre-Conference Seminars3:30 – 4 pm. Events Committee Meeting4 – 4:30 p.m. Associate Member Meeting (Exhibit Hall)4:30 – 7:30 p.m. Carriers Appreciation Reception (Exhibit Hall)

7 a.m. – 5:30 p.m. Registration7 – 8:30 a.m. Chairman’s Breakfast and Annual Business Meeting8:45 – 10:25 a.m. Welcome & Opening General Session10:30 a.m. – 1 p.m. Exhibit Hall Open11:30 a.m. – 1 p.m. Luncheon (Exhibit Hall)1 – 2:15 p.m. General Session & Awards Presentation2:15 – 2:30 p.m. Break2:30 – 3:30 p.m. Concurrent Educational Sessions2:30 – 4:45 p.m. RCA Board of Director’s Meeting3:30 – 3:45 p.m. Break3:45 – 4:45 p.m. Concurrent Educational Sessions4:45 – 7 p.m. Exhibitor Reception (Exhibit Hall)7 – 9 p.m. Exhibit Tear Down8 – 11 p.m. RCA’s 20th Birthday Bash

7:30 – 10 a.m. Registration8 – 8:30 a.m. Continental Breakfast8:30 – 10:30 a.m. General Session10:45 – 11:45 a.m. Concurrent Educational Sessions

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Early Bird Until 8/31/12

After 8/31/12and on-site

RCA Member Booth Fee $2,750 $2,850Non-Member Booth Fee $5,000 $5,100

Early Bird Until 8/31/12

After 8/31/12and on-site

RCA Carrier Member (First Attendee) $595 $695Additional RCA Carrier Member $495 $595RCA Associate Member (First Attendee) $595 $695Additional RCA Associate Member $495 $595RCA Affiliate Member (First Attendee) $595 $695Additional RCA Affiliate Member $495 $595Non-Member $1,345 $1,445Spouse/Guest $295 $295Golf $175 $200

Diamond $10,000 or abovePlatinum $5,000 or above

Gold $2,000Silver $1,500

Bronze $1,250

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July/August 2012 15

q&a

During the AGL East Regional Conference in Bethesda, Md., AGL interviewed Jason Hill, a managing director of Media Venture Partners. The company provides investment banking advisory services for busi-nesses in the telecommunications, towers, Internet infrastructure and media sectors. Here are his remarks, edited for length and style.

AGL: A year ago, it was doom and gloom: T-Mobile USA and AT&T Wire-less. Now, we’re back to highs for the industry with a great tower portfolio com-ing back on the market. Your thoughts?

Jason Hill: It’s a better time out there. We all were concerned about what would happen with AT&T and T-Mobile and how that would affect the smaller companies in the tower industry, and whether any opportunities for them would remain. The merger fell apart, but there still is uncertainty about how fast the build outs are going to happen. But having four major tenants is better than having three. More builds are go-ing to have to come. More amendments are going to have to come because the

demand for data is so great.AGL: LightSquared probably is dead

and gone. Clearwire is maybe back from the edge. How are they affecting the industry?

Jason Hill: The LightSquared news probably confi rms what many suspect-ed. It was a tough play. There were many reports in the news about LightSquared having diffi culty dealing with the GPS interference problem and certainly with the GPS lobby, which is powerful with pilots and the agricultural community. Tower companies began to discount whether LightSquared would become a solid tenant. You’ll see LightSquared tied up in some kind of litigation. Harbinger Capital, which backs Light-Squared, said it might be going into bankruptcy. Tower companies began to forecast that LightSquared would not become a tenant anytime soon, if ever.

Last year, it was uncertain until No-vember what Clearwire would be doing with Sprint. That relationship seems to have been further cemented and appears to be growing stronger. Clearwire is go-ing the 4G route that Sprint ultimately wants it to. Tower companies are growing

Opportunities Growfor Tower Investments

more confi dent that Clearwire will be around for a while. We’ll see. You’re not seeing Clearwire being valued as a tower tenant the same as AT&T, T-Mobile and Verizon. But there is more comfort with Clearwire today than there was last fall.AGL: Is it still possible for a mom

and pop to enter the tower industry, build a tower, and make any money?

Jason Hill: Sure. Absolutely. There is room for everyone. We have many mom-and-pop clients who have built up a tower portfolio of 10 to 30 towers, sold them, and then used the proceeds to do it again. Last year was slower for that business. We didn’t see as many of our mom-and-pop clients build up a large portfolio of towers to then be sold. But we are seeing more activity starting to bubble up this year. It is just a matter of having the right relationships with the carriers, fi nding the right spots, getting the capital and putting the portfolio together.

If you look at lots of industry reports from the perspective of what the wireless carriers are looking to do and where the

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If you are building a new tower you must comply with the National Environmental Policy Act (NEPA) and the FCC National Programmatic Agreement (NPA) for Impacts to Historic Resources. In many cases, modifications to existing towers must also comply with the NPA.

We have been working with the tower and wireless industries since 1993. Our track record speaks for itself.

q&a

demand is going to be, we still will need additional towers, whether for in-fi ll or additional coverage. The opportunity still exists for the mom and pops. It is not as easy as it was from 2008 to 2010, but we are starting to see the dam start to break — slowly — with respect to the opportunities for the mom and pops.AGL: As technology changes, the

need for sites is changing. Are you a fan of the so-called street furniture model of serving dense urban areas? Are carriers going to be placing antennas everywhere, not just on towers and rooftops?

Jason Hill: In urban areas, carri-ers are going to look to do whatever they can do to satisfy the demand for data they will have in those areas. In an urban area, macro sites that cover small geographies will remain an op-tion. Distributed antenna systems will remain a viable option in urban areas. And Wi-Fi will be an option in urban areas. We expect equipment to be put on many different things to satisfy the demand in urban areas. As network coverage extends to more rural areas, it will become more of a macro site-based

business. But certainly, the denser areas will see many kinds of approaches used to try to serve the data need. AGL: Five years from now, we’re

going to look back and say, “I wish I

had started a business doing …” What will that business be?

Jason Hill: It would be a business that does mobile photographs and allows Facebook to buy it for $1 billion without

any revenue. If I could invest in that busi-ness, I would be doing it all day long, even though I don’t understand what it is.

I don’t see how staying within our space is bad. You’re in an industry where you are only at the beginning of the phone being used for data. More and more smartphone adoption will take place. As the younger generation matures and becomes teenagers, they will be getting smartphones. They won’t just be getting a voice-enabled phone. The older gen-eration is learning to adopt smartphones and fi gure out what the technology is and whether it’s the face time with their children at college or face time with their grandchildren or watching videos that their kids put on YouTube — watching that on their mobile — we’re in a space where data is going to drive a lot of suc-cess for those who stay in this space. And particularly with this photo-sharing thing, Mark Zuckerberg tends to agree.

Jason Hill is a managing director in the Media Venture Partners offi ce in Boston. His email address is [email protected] information about AGL Regional Confer-ences, visit www.agl-mag.com/events.

Jason Hill: “We still will need additional towers, whether for in-fi ll or additional coverage. The opportunity still exists for the mom and pops.”

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q&a

Paula Doublin, a distributed antenna system (DAS) expert with AT&T Servic-es, spoke at the DAS Congress. Edited for length and style, here are questions from the conference chairman, Joe Mad-den, and from the audience, along with her answers.

Joe Madden, Mobile Experts:I’m interested in knowing how AT&T looks at doing neutral-host systems and building out a DAS and then hosting other carriers. How often do you think you will do that instead of relying on the building owners themselves to step in and take that role?

Doublin: Neutral host — that’s in our charter, actually. When we stood the Antenna Solutions Group up, we wanted to be a neutral-host provider. I believe we are a pretty good one. We would prefer to own. We certainly will join. When you get right down to it, it is not that much harder to do a neutral-host system than it is to build out a proprietary DAS.

Audience member: What are the criteria you use to decide when to join? I can understand with malls, airports and stadiums. With a university, every-one wants the stadium. Is there a dollar fi gure per subscriber that is a magic number that AT&T would use for a static audience for administrative buildings, for students?

Doublin: It goes into a model. We’re going to take a look at the market itself. Where are we positioned in the market? We have to take a look at where our macro network is. How is it performing? How big is the building and how old is it? What is the occupancy rate? The answers

all feed into the model. Then there is the cost to join. Is the building owner going to ask for a capital contribution? Are we going to pay a monthly rent? How are the four corners of the deal structured?

Audience member: From a fi nancial perspective, is there a magic number that I can understand for a high-traffi c place? Like the mall or stadium, that number is a lot lower per user, whereas in a static audience, what makes the decision that

we would join a particular building and not another?

Doublin: There is no secret sauce to that, really. We look at each building on an individual basis. There are some things that just make absolute sense to do.

Audience member: It seems like the AT&T DAS construction standard requires the use of a lot more space, equipment and antennas than what we are looking for in a multicarrier environment in a university. Help me understand. Is a standard just what you want versus the average within the industry?

Doublin: Number one, we’re future-

Distributed Antenna Systemsproofi ng to a certain extent. We build out to three-year capacity requirements. We see the consumer’s use of data, ap-plications, handsets, iPads and all those devices. We don’t see that use going anywhere but up. So, yes, they are big systems, and they do take up space, and they perform beautifully.

Steve Ambrose, Texas Christian University: As a neutral host, we’re having a diffi cult time because we have

trained our students, faculty and staff to call us with wireless service complaints. We’re having a real diffi cult time pinpoint-ing areas with inad-equate service. Are we going to have to walk around with users’ cell phones and try to rep-licate problems?

Doublin: The an-swer is monitoring and alarming a DAS product straight down into the antennas. We have done some work in the areas of simple network management p ro toco l (SNMP) where we can actu-ally see performance.

We have a box that we can deploy down into the network that just basically sits there and gathers information about it, and whenever we see a trend, or we see something that doesn’t feel right or look right, that means you need to dispatch or you need to at least remotely log on to your system and see.

Not everyone is doing that. In the spirit of full disclosure, we have only been doing it for a little over a year. But what I’m seeing on it is probably a game-changer at least from an opera-tor perspective. Every system has the capability to do that, systems that are relatively new. The older systems don’t have the capability.

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Paula Doublin: “I would love to build out every college campus in this country.”

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July/August 2012 19

Ambrose: What is your appetite for stadium venues or a campus environ-ment with a concentrated number of people?

Doublin: As far as the money goes, I would love to build out every college campus in this country. It really depends on the kinds of agreements that have been entered into by the campuses and whether it is a third-par-ty provider or we are going in or Verizon is going in or whoever is going in, it just really depends. I think every one of us would want to be on there. I would be happy to chat with you about it.

Ambrose: Are you leaning away from some of the stadiums?

Doublin: If you had asked me that question three weeks ago, I probably would have said, absolutely. But over the last three weeks, the number of stadiums and campuses that have hit,

shows that that part of the market is as hot as ever.

Andy Hulsey, University of Central

Florida: We’re trying to work with your company to build out our DAS. Refer-ences of private corporations, universi-ties and colleges where AT&T has built a neutral-host DAS always say AT&T did a great job. But when the question comes up, has AT&T added another car-

rier, each reference says other carriers have expressed interest, but none has been added. Why not?

Doublin: We are two years old, and it took a while for us to build a reputation. I know we have to overcome the perception that carriers might not want to join anoth-er carrier’s neutral-host sys-tem. Verizon, Sprint, AT&T — we join each other’s neutral-host DAS. I don’t know how to better answer your question. There has to be some faith that comes into it. And other carriers have to be assured that if they join our systems, it will be a great

experience for their customers.

Paula Doublin is assistant vice president of construction and engineering for distributed antenna systems at AT&T Services. She spoke at the American Conference Institute’s DAS Congress. For information about the DAS Congress, visit www.dascongress.com.

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O

environment

One of the Occupational Safety and Health Administration’s (OSHA’s) most potent enforcement weapons is the will-ful citation, which can carry a monetary penalty of up to $70,000 per violation. If OSHA can prove that the willful violation resulted in a fatality, there is potential criminal liability. A willful viola-tion can also affect third-party liability litigation if it arose out of an accident involving personal injury. It can affect the employer’s busi-ness reputation and liability insurance premiums. As a re-sult, no employer would ever wait to receive a willful ci-tation.

Recently, the Federal Circuit Court of Appeals for the D.C. Circuit issued a decision that will signifi-cantly affect OSHA’s ability to issue and to prove a willful violation. Dayton Tire v. Secretary of Labor, No. 10-1362 (D.C. Cir., March 6, 2012). The Court reaf-

burden to establish a willful violation.

In the process, the Court was also very critical of the timeliness and the manner in which OSHA prosecuted the case.

In 1993, a Dayton employee died from injuries sustained when a machine activated unexpectedly. The incident prompted OSHA to send an inspector

to the plant to assess Dayton’s lock-out/tag-out (LOTO) compliance. Based on that inspection, OSHA cited Dayton, al-leging 107 willful LOTO violations and proposing a $7.5 million penalty. Of the 107 cited violations, 98 were for failing

Appeals CourtOverturns OSHA Citations

to train individual Dayton employees to the “authorized” level. The remaining nine violations were for failing to develop adequate safety procedures for particular machines, failing to utilize LOTO proce-dures, failing to provide necessary locks and tags to authorized employees, and

failing to conduct periodic inspections.

Af te r a hear-ing before an Oc-cupational Safety and Health Review Commission (OS-HRC) administrative law judge (ALJ), which included tes-timony from 90 wit-nesses during more than 31 days of trial, the ALJ issued a de-cision in 1997 that affirmed each vio-lation that had not been withdrawn by OSHA. Addition-ally, even though the ALJ found that Dayton’s “actions

were consistent with a good faith belief and effort to comply with the LOTO standard throughout the Oklahoma City plant,” he characterized 37 of the viola-tions as willful because “Dayton knew its corporate parent, Bridgestone, had

By Mark A. Lies II and Craig B. Simonsen

The federal Circuit Court Of Appeals for the D.C. Circuit has overturned numerous willful OSHA citations and has clearly reminded OSHA and the

safety

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July/August 2012 21

previously been cited under the LOTO standard for similar violations.” Dayton Tire, 1997 WL 152083 (No. 94-1374, 1997). The ALJ assessed a total penalty of $518,000.

Review Commission decisionFrom 1997 until 2010, the case sat fully

briefed before the OSHRC. Then, in 2010, two members of the OSHRC not only upheld the citations, but overturned the ALJ and held that all of the violations were willful, with a penalty of $1.975 million.

Circuit Court decisionThe Circuit Court found that al-

though it took the Commission more than 12 years to rule on the case, Dayton was not entitled to dismissal based on the OSHRC’s failure to ad-judicate the case. “Although we are empowered to set aside the Commis-sion’s order on the basis of delay, we decline to do so here. Yes, in the words of the secretary herself, the Commis-sion’s 12-year delay was ‘excessive and deplorable.’ But as Dayton admits — and its cited cases demonstrate — delay alone is not enough; it is the ‘consequence[s] of the Commission’s delay’ that dictate whether corrective action is needed. And in this instance, the consequences of the Commission’s delay do not justify setting aside its chosen penalty.” The Court noted that “[w]hile the deterrent effect of

that enforcement of this penalty will have some effect on Bridgestone and employers in general.” The Court con-cludes, though, that “[o]ur willingness to enforce the Commission’s penalty should not be mistaken for approval of its ‘deplorable’ conduct.”

The OSHRC in its 2010 decision found sufficient evidence to conclude that Dayton had willfully violated the Occupational Safety and Health Act as a matter of corporate policy. The linchpin of the OSHRC willfulness determination was

either knew Dayton was noncompliant or was unwilling to investigate for fear of uncovering Dayton’s noncompliance.

The Court found that this position was based more on speculation than evidence. Accordingly, the OSHRC’s willfulness characterization did not withstand review. The Court found the evidence in the record

-cally, the Court noted that each time an issue was raised about Dayton’s compli-ance with the LOTO standard, the safety manager took some action. Although the safety manager’s effort and analysis may not have been as thorough as the Court would have hoped, the Court stated that it was “not nothing.” The Court explained that establishing the plain indifference necessary to support a willful violation is a high burden. The Court likens the test to a lack of good faith, and in rejecting the OSHRC’s decision the Court states:

“Indeed, what the ALJ acknowledged and the Commission dismissed was the possibility of good faith.” The safety man-ager “made some effort to ensure Dayton’s LOTO compliance, and under these cir-cumstances, some effort is enough to save Dayton from a willfulness determination.”

The Court concluded that the OSHRC “lacked substantial supporting evidence

were willful. Accordingly, we vacate that portion of the Commission’s order and remand for the Commission to reassess the nature of Dayton’s violations and recalculate the appropriate penalty.”

RecommendationsIn order to avoid potential liability for

willful violations, an employer should be prepared to establish that it acted in good faith — the antithesis of willful conduct. This can be done by:

-ment of the workplace

address such hazards

of employees regarding such programs-

mented discipline up to and including

Mark A. Lies II is a partner in the Seyfarth Shaw law firm Chicago office. His email address is [email protected]. Craig B. Simonsen is a senior paralegal in the Seyfarth

[email protected].

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regulation and control

Venn and the Art of WA perfect intersection of regulation and control, technology and willingness on the part of landowners must be met to allow development of wireless telecommunications sites. Is it any wonder that worry keeps site developers awake at night?

IIt’s important to educate legislators and local governments about the 1996 Telecommunications Act, which added Section 332(c)(7) to the Communica-tions Act of 1934. This section, also referred to as Section 704, affects the permitting of wireless facilities by preserving local government author-ity over tower siting decisions, while placing certain limitations on the exercise of that authority.

Congress thereby set up a balancing act. It encouraged rapid development of new communications technology, yet it preserved state and local au-thority over tower siting. Thus, local government authorities viewed the 1996 Telecommunications Act as af-fi rming their control over tower siting decisions and, in fact, the very title of Section 704 of the Act identifi es the preservation of local authority over tower siting as its purpose. Those in the industry viewed the Act as sup-

porting rapid deployment by limiting local government authority. It’s that balancing act that keeps so many site acquisition specialists and attorneys busy and employed.

It also keeps many site develop-ers awake at night, wondering why it takes so long to develop a tower site. It is because of the multiple layers of regulation and control (see Figure 1). One of the cable news shows has a seg-ment called “Regulation Nation,” which highlights extensive U.S. regulation and its effect on businesses, and you need look no further than wireless telecom-munications to fi nd an industry that is heavily regulated by nearly all levels of government.

Perfect intersectionGetting a site on the air requires

finding the perfect intersection of a willing landlord, radio-frequency (RF) technology requirements, com-

munity approval and numerous levels of federal, state and local government approvals. You have to have a willing landlord because carriers can’t just condemn land, telling owners they’re going to take it just because it’s ideal for the network. Although a perfect RF world of fl at land, no foliage, no ob-structions and no limitations on tower heights does not exist almost anywhere that people live or use their mobile phones, certain RF requirements must be met. Residents of the community have to be able to offer input. Mostly the FCC, but also other federal agen-cies, impose numerous requirements involving environmental protection, historic preservation, migratory birds, wetlands — you name it. And state and local governments also exert a degree of control in many cases duplicating historic and environmental reviews. Many other circles of regulation and control could be added to Figure 1, but you get the idea of why it is so challeng-ing to locate an antenna site.

What are the limitations on local authority? Although municipalities can discriminate, the discrimination must not be unreasonable, and the discrimination must stop short of hav-ing the effect of prohibiting wireless service. Municipalities must act within a reasonable amount of time. More-over, the denial of an application for a permit must be in writing and must be

Limitations on Local Authority No unreasonable discrimination No prohibition on service Must act within a reasonable amount of time Denial must be in writing supported by substantial evidence No denial based on RF emissions if FCC-compliant

above ground level www.agl-mag.com22

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July/August 2012 23

Wireless RegulationBy Lisa Murphy

supported by substantial evidence. The municipality cannot deny an applica-tion based on the perceived effects of RF emissions on health, provided that the carrier proves its proposed facility is FCC-compliant. That’s an important thing to remember when making an application for an antenna site or pleading your case at a public hearing.

Local governing authorities have been parsing the language of the Act, which places limits on their authority, to determine what exactly is meant by “unreasonable discrimination” or “prohibition.” Carriers have gone to

court in all of the federal judicial cir-cuits to fi gure out exactly what reason-able or unreasonable discrimination means, and what prohibition means

and to further clarify what Congress intended by the language it used in Section 704. For example, if one car-rier is allowed to place an antenna in

Figure 1. A Venn diagram of several sources of regulation and control of wireless telecommunications antenna site development shows that many requirements must perfectly intersect to bring about approval for antenna collocation or new site construction.

Municipal Perspective Municipalities are protecting citizens from harmful land use. Land use regulation starts at a place of “No.” Wireless facilities are typically conditional or special uses.

Uses deemed incompatible with surrounding uses except if certain conditions are met.

July/August 2012 23July/August 2012

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regulation and control

a given area, and you’re the second carrier in the area asking for a site, can the authorities deny you? Would that be prohibition?

In 2008, CTIA asked the FCC to clarify what these key terms in the Act mean and to help speed up the local government approval process. CTIA asked the FCC to set a 45-day time limit for local governments to process appli-cations for sites involving antenna col-location and 75 days for sites involving the construction of new towers, which some concluded was a little bit aggres-sive. CTIA asked the FCC to deem an application approved if these deadlines were not met.

CTIA also wanted the FCC to defi ne what prohibition of service means. Is it one carrier in a search ring? Two carri-ers? What exactly was intended?

Once again, a little bit aggressively,

and 150 days to process an applica-tion for a new tower were reasonable periods.

The FCC gave municipalities 30 days to review applications for com-pleteness. I work with a planner in Virginia Beach, Va., who uses a form letter to deny applications that are in-complete. When he sees something is missing from an application, he sends the applicant a denial letter right away. At least that is clarity. With complete applications, municipalities now must comply with the shot clock ruling’s deadlines.

Unfortunately, the FCC’s ruling did not go so far as deeming applications approved in the event that a munici-pality does not strictly adhere to the deadlines; nevertheless, the shot clock ruling certainly is helpful in going through the process.

In January, the FCC shot clock ruling was upheld by the Fifth Circuit Court of Appeals in City of Arlington v. Federal Communications Commission (Case No. 20-60039). It’s the fi rst case in which a federal court has confi rmed that the FCC has the authority to interpret the Act and that the shot clock ruling complied with the rulemaking requirements of the Administrative Procedure Act.

It was thought that the FCC’s defi -nition of prohibition would be help-ful in the Mid-Atlantic region in the states falling under the jurisdiction of the Fourth Circuit Court of Appeals because the Fourth Circuit had previ-ously ruled that the term “prohibition” did not preclude local governments from denying applications because one or more carriers already have coverage in a particular search ring. However, after and despite the City of Arlington case, the Fourth Circuit in two cases where prohibition was al-leged later opined that it did not have to defer to the FCC’s interpretation of the term “prohibition,” rejecting arguments made by T-Mobile and AT&T in T-Mobile Northeast LLC v. Fairfax County Board of Supervisors,No. 11-1060, 2012 WL 664504 (4th Cir. Mar. 1, 2012), and in New Cin-gular Wireless PCS, LLC d/b/a AT&T Mobility v. Fairfax County Board of

Supervisors, No. 10-2381, 2012 WL 922435 (4th Cir. Mar. 19, 2012).

Harmful land useFrom their perspective, municipali-

ties are protecting citizens from harm-ful land uses. I represent people who develop and operate gas stations and all kinds of other land uses that some people don’t like. Municipalities are not singling out the wireless industry. They see regulating land use as a way to keep us or anyone else from harm-ing citizens. Thus, land use regulation starts from a place of “No.” So from the municipal perspective, antenna site developers who ask for approval are asking for something that isn’t available by right. It’s not automatic. There’s a healthy dose — some might say more than a healthy dose — of skepticism. Wireless facilities are typi-cally conditional uses, special uses or variances, but in general, across the board, it’s a land use that by its very nature is deemed to be incompatible with other land uses. Antenna site developers have to mitigate any po-tential effects through conditions or demonstrate that there aren’t going to be any effects from the proposed use given the location, design, etc., in order to secure an approval.

QuestionsThe common questions fall on two

sides. The fi rst side involves technol-ogy. “Why do you need this antenna facility?” The question often is followed quickly by the demand, “Prove it.” Local authorities hear about the possible com-ing use of smaller antennas and fewer antennas, and they want proof that car-riers need what they say they need.

My answer to that is frequently to ask, “Would they have hired a lawyer if this wasn’t something that’s very im-portant to their business plan?”

Local authorities are going to ask, “Are you done yet? How many more are you going to need? Why so tall? Why so many antennas? Why does it have to be here? Is it safe? And what are your long-term plans?” That’s my favorite question. “Tell me what your network development needs are going be in the

Unfortunately, the FCC’s ruling did not

go so far as deeming applications approved

in the event that a municipality does

not strictly adhere to the deadlines;

nevertheless, the shot clock ruling certainly

is helpful.

CTIA wanted the FCC to pre-empt any ordinance that required an automatic variance for a tower.

In response to CTIA’s request and after an extensive public comment period, on Nov. 18, 2009, the FCC issued a declaratory ruling, which is commonly referred to as the shot clock ruling. In the shot clock ruling, the FCC declared that 90 days to process an application for a collocation on an existing telecommunications site

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July/August 2012 25

next fi ve or 10 years. What’s the total number of towers that you’re going to need in our jurisdiction? When will your network be complete?”

Some questions on the other side involving aesthetics, safety and noise are: “What’s it going look like? Will I see it? Will I notice it? Will it hurt me, my family or my property?” People’s lives have been affected by the weak state of the economy. You’re asking them for their permission to construct a facility that the ordinance deems incompatible with their uses, and they really want to know how this is going to affect them. “Will it fall in heavy wind, an earthquake or a natural disas-ter?” some may ask.

In El Paso, Texas, part of a faux palm frond fell onto someone’s car from a tower disguised as a palm tree. It nearly struck the driver. These types of inci-dents raise safety concerns.

People also may ask, “Will I hear noise? Is there a generator? Is the gen-erator going to make noise?”

Local offi cials are well versed in analyzing planning and impact issues. They’re less experienced with technol-ogy issues, the Telecom Act, the shot clock ruling, and even the wireless facilities provision in Section 6409 of the Middle Class Tax Relief and Job Creation Act. These are not aspects of land use decision making that they’re necessarily going to know, and site de-velopers may have to educate them.

Yet, education from the industry is typically ad hoc. If I go in with an ap-plication on behalf of a carrier client, I’ll help to educate the local offi cials about the technology and what’s going on. However, site developers, carriers and industry representatives normally only come before the local govern-ments when they need sites approved. They usually are not around when it’s time for ordinance changes, which is why we encourage our clients to stay involved, especially if they expect to develop sites in the future in a particu-lar municipality. When it comes time to revise local tower ordinances, most municipalities are looking for industry input, and given the nature of the indus-try, that is often diffi cult to fi nd.

This art ic le is based on Lisa Murphy’s presentation during an AGL Regional Conference session, “What We Must Teach Municipalities About Wireless,” conducted at the Las Vegas Convention Center in collaboration with IWCE.

Murphy is lawyer and shareholder in the Norfolk, Va., offi ce of LeClairRyan.

She is a veteran of the wireless site development industry with extensive experience representing carriers, tower companies and vendors in all facets of wireless site development, including acquisition, leasing, zoning, permitting, and due diligence review. Her email address is [email protected].

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above ground level www.agl-mag.com26

ITransit Wireless, AT&T and T-Mobile collaborate to bring the fi rst wireless voice and data services to New York City Subway stations.

It was a long time coming, consider-ing the almost ubiquitous proliferation of wireless voice and data in the 21st century, but wireless telecommunica-tions service is becoming a reality in the New York City Subway. One of the last bastions of wireless isolation in America is about to fall.

Under a Metropolitan Transporta-tion Authority (MTA) license agree-ment, Transit Wireless will contract with AT&T Wireless and T-Mobile USA to deploy wireless voice and data

safety

Data Down Under: Wireless Voice and Data Come to New York Subways

By Ernest Worthman

communications capability in six New York subway stations as part of a pilot program. The remaining 271 stations are expected to be wired and opera-tional by 2015. There are also plans to put RF in the tunnels, but for now, the plan is to serve only the stations.

The project is expected to cost $200 million, including the cost of New York City Transit (NYCT) workers to provide fl agging, protection and other services. The project cost is shouldered by Transit Wireless and the wireless

carriers. Payments from carriers will be split evenly between the MTA and Transit Wireless. Carriers will receive their revenue from the traditional wire-less voice and data model.

The issuesNew York’s subway poses unique

challenges to wireless coverage com-pared with other subways. Most of New York’s subway stations were built 100 years ago. They were built with heavy steel girders that block radio sig-

The New York City Subway boasts musicians who perform in the stations and artwork that decorates tunnels and platforms, not to mention 1.563 billion riders annually, many of whom want to use their wireless devices while underground.

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July/August 2012 27

nals in some places and play havoc with propagation where they don’t. The usual distributed antenna systems don’t work well in the stations. Add to that the mov-ing metal of the trains and it becomes nearly impossible to design a reliable and pervasive wireless system for use in such an environment. Steel is every-

where — even the steps in the staircases are covered in steel for durability.

And if that wasn’t enough of a tough nut to crack, add nearly constant vibra-tion and dust, mostly from train brakes. The combination causes problems for communications equipment. Dust multiplies the problems because if it

accumulates on ground plane surfaces, it can causes passive intermodulation (PIM) interference that further degrades signal integrity.

The solutionExtending cell phone service to the

New York subway was a complex engi-

safety

Figure 1. The wireless carriers’ equipment and the fi ber-span head end equipment share a base station hotel that posed less of a problem for system designers than the RF wave propagation and antenna aesthetics.

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above ground level www.agl-mag.com28

distributed antenna systems

neering feat. Few off-the-shelf solutions were usable as-is. The useful off-the-shelf equipment needed re-engineering to meet the difficult environmental conditions.

For example, the remote fi ber node with the integrated bidirectional am-plifi ers was intended to be mounted in public access areas. The integrated amplifi ers had to be designed to handle seven frequency-band slots from 700 MHz to 2.7 GHz. Moreover, the box had to be specially designed to handle passive cooling because of the large amount of metal dust in the air. With ventilator cooling, the metal dust

would be drawn into the unit and cause any number of failures. As a result, the boxes were designed to meet the IP66 specifi cation for water and dust resis-tance. They also were designed for wall and ceiling mounting.

The infrastructure strategy in-volved routing fi ber-optic cables along city streets and installing dozens of antennas. One of the trickiest tasks was ensuring the cell site hand-off be-tween underground and above-ground antennas as callers walked in and out of stations.

Transit Wireless collocated the carriers’ base stations with its optical

distribution equipment in its fault-tolerant, environmentally controlled facility. Each carrier’s base stations connect with Transit Wireless’ radio interface and optical distribution sys-tem at the facility.

The technique combines the radio signals and converts them to optical signals for distribution on Transit Wireless’ fiber-optic cables. These cables run throughout ducts under city streets to subway stations where the cables connect to multiband RFNs on every platform and mezzanine and at various points within public access passageways. Coaxial cable connects

e a c h r e m o t e fiber node and extends signals to strategically located anten-nas throughout each s ta t ion .

The elegant design distributes low-level radio signals everywhere to pro-vide seamless coverage above ground near the stations to below ground. An integrated network management system monitors the service and if it detects a problem, it automatically dispatches a technician and logs the event.

The business side was equally tricky. Rather than let several cell phone companies put their antennas in the subway, MTA officials con-tracted with Transit Wireless to build the system and rent bandwidth to the cell providers. The company’s major-

ity owner is Broadcast Australia of Chatswood, Australia.

The two primary technological challenges involved RF wave propaga-tion in an environment hostile to RF, and component (primarily antenna) aesthetics. The backbone equipment was less of a problem because it could be housed in a base station hotel, also known as a head end. Figure 1 is a block diagram of the head-end technology.

Camoufl aged antennaSome of the components integrated

in this installation required a custom confi guration. The antennas, for exam-ple, needed to be effective but some-what inconspicuous when installed in the open. The approach was to hang them from the ceiling so they resemble hanging lights (see photo above left). Each antenna is fed by a 7/8-inch fi re-retardant, low-smoke, zero-halogen (LSZH) coaxial cable. The vertically polarized antennas are either 2-dBi or 4-dBi gain omnidirectional units that handle up to 50 watts of RF input. The antenna intermodulation interference is rated at 140 dB.

The heart of the system The remote fi ber nodes — the heart

of the system — on the platforms are highly fl exible, modular, fi ber bidirec-tional amplifiers that support seven frequency-band slots (see photo above right). The bands include 700 MHz (20dBm), 800/850/900 MHz (20 dBm),

The antennas that hang from the ceiling resemble hanging lights, in effect hiding the antennas in plain sight.

Sealed enclosures protect remote fi ber nodes from metallic dust ingress and thus require passive cooling — no ventilator fans.

Sou

rce:

Tra

nsit

Wire

less

One of the trickiest tasks was ensuring the cell site hand-off between underground

and above-ground antennas as callers walked in and out of stations.

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July/August 2012 29

and 2.7 GHz. The boxes offer three RF outputs, two ports at 20 dBm to 25 dBm, and a center port at 6 dB. Each port has a unique access point providing robust license-free band-width. The optical budget is 8 dBo, and support is provided for code-division multiple-access (CDMA), Global System for Mobile Communi-cations (GSM), Long Term Evolution (LTE) and location-based services (LBS) technologies. Their service/protocols are:

700 MHz (FDD/ Lower A, B and C, and Upper C)

800/900 MHz (FDD/rebanded spec-trum)

850 MHz (FDD/cell band) 1.9 GHz (FDD/EPCS Band) 1.7/2.1 GHz (FDD/AWS Band) 2.4 GHz (three integrated access points)

2.7 GHz (planned for integrated picocell)

4.9 GHz (future for public safety applications)

5.8 GHz (future for miscellaneous applications)

The remote fiber nodes also in-clude an unmanned switch providing a gigabit Ethernet link to and from the base station hotel to support Wi-Fi wireless connections and other time-division duplexing (TDD) technologies. The remote fiber nodes are connected to an external uninterruptable power supply to keep them operating should the AC power be interrupted.

The remote fi ber node architecture forms a robust network management system using controller-area network bus (CANBus) technology. This de-sign replaces conventional mobile wiring systems that have ungainly wiring, harnesses, relays and wiring joints with functional, solid-state network systems. The solid-state network components interface with

today’s electronic mobile component. Meanwhile, CANBus systems are sig-nifi cantly more reliable and effi cient, and drastically reduce the downtime for maintenance and fault-fi nding.

There are two types of fi ber trans-

ceiver units in this system. One is for location-based services support, which allows a one-to-one connection of a pilot beacon with an individual remote fi ber node to support CDMA geo-location to an individual plat-form, mezzanine or passageway. The other is for the licensed RF-to-optical conversion. The LBS location-based services fi ber transceiver unit design is a feature-laden interface that provides geo-coding for handset-based CDMA mobiles. The optical signal is detected

The remote fiber node architecture forms a robust network management system using controller-area network bus (CANBus) technology.

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above ground level www.agl-mag.com30

and routed to the appropriate band and amplifi ed at 12 dB below the pilot signal at the remote fi ber node.

Typically, there are three antennas per remote fiber node per subway platform. The remote fi ber node is positioned in the center of a typical 600-foot-long platform along with an antenna, and two other antennas are placed 200 feet in each direction from the node. The antennas align with the

ingress and egress points of the sta-tions and thus minimize the amount of

distributed antenna systems

additional infrastructure required. Several other components, such as

the optical management unit and the communications controller, round out the network management system (see Figure 2). It has a state-of-the-art, comprehensive and secure monitor-ing and control application. The net-work management system provides monitors, alarms and controls. The technology installed at the center

includes servers running simple network manage-ment protocol Version 3 (SNMPv3). This protocol is the latest in interop-erable standards-based protocols for network management. SNMPv3

provides secure access to devices by a combination of authenticating and

encrypting packets over the network. It provides both security models and security levels. A combination of a se-curity model and a security level will determine which security mechanism is employed when handling an SNMP packet. What this all means is that the system can protect user data and provide a robust redundancy protocol for reliability via gigabit Ethernet and optical routing.

At the network management system, the display is a graphical user interface, so any user familiar with the Microsoft Windows interface can understand the data presented. All of this edge-of-the-envelope hardware, software and redun-dancy offers an exceptional link budget. The modular design allows components to be quickly and easily swapped out in case of a failure. In addition, the system

Figure 2. An optical management unit and communications controller round out the network management system that has a state-of-the-art, comprehensive and secure monitoring and control application. The network management system provides monitors, alarms and controls.

At the network management system, the display is a graphical user interface,

so any user familiar with the Microsoft Windows interface can

understand the data presented.

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July/August 2012 31

Figure 3. Enhanced 911 services for GSM are integrated into the system by taking an uplink signal sample from each remote fi ber node and assigning a unique location measuring unit port. Because the location of each remote fi ber node is known, each location measuring unit port can be programmed and report into the E911 system to provide platform, mezzanine and passageway granularity.

Figure 4. Enhanced 911 services for CDMA operate in reverse to that of GSM. A unique copilot beacon is generated for each remote fi ber node that allows handsets to report their own locations.

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distributed antenna systems

to be quickly and easily swapped out in case of a failure. In addition, the system is relatively future-proof so long as cur-rent frequency bands and frequency sub-bands remain the same. Redundancy features guarantee that the system will remain operational despite all but the most catastrophic failures.

Finally, enhanced 911 services are integrated into the system for both

CDMA and GSM (see Figures 3 and 4). GSM is supported by taking an uplink signal sample from each remote fi ber node and assigning a unique location measuring unit port. Because the loca-tion of each remote fi ber node is known, each location measuring unit port can be programmed and report into the E911 system to provide platform, mezzanine and passageway granularity.

CDMA operates similarly but in re-verse to that of GSM. A unique copilot beacon is generated for each remote fi ber node that allows handsets to report their own locations.

A long time in planning and com-ing, the New York City Subway’s mobile communications network is fi nally up and running. Although far from reaching the ultimate goal of ubiquitous wireless telecommunica-tions interconnection from all points subterranean, the trial system is oper-ating, despite a range of technical and political hurdles that no other subway system has had to overcome.

Outfi tting trainsIn the end, ingenuity, technology and

perseverance won out. This means that future end-users can expect wireless voice and data throughout the station complex during the next few years. And as the stations are being wired for wire-less, the engineers, planners, providers and politicians are busy developing and

To prevent crippling damage and economic loss resulting from the all-too-easy act of removing basic tower hardware, a new and innovative product has been developed. Comprised of a unique nut with spin collar and matching socket, SpiNut is so tamper resistant that it has been designated as a Qualified Anti-Terrorism Technology (QATT) by the Department of Homeland Security. Because the location

of each remote fiber node is known, each location measuring

unit port can be programmed and report into the E911 system to

provide platform, mezzanine and pas-

sageway granularity.

discussing the technology that will put wireless telecommunications on the trains. Outfi tting the trains will be a formidable undertaking, however, con-sidering the propagation challenges in winding tunnels on moving trains made mostly of metal. But, that is what they once said about the stations.

Ernest Worthman is the owner of Worthman & Associates, Denver. His email address is [email protected].

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above ground level www.agl-mag.com34

JJohn Celentano, a strategic marketing manager with Tessco Technologies, spoke at the AGL Regional Conference in Las Vegas, which was collocated with IWCE. Here are some of his remarks, edited for length and style.

LTE stands for Long Term Evolution, and they don’t call it Long Term for noth-ing. The technology is in the early stage of deployment and development as a new standard in the industry for wireless.

LTE is important for a number of reasons.

First, it enables high-speed wireless Internet access. Earlier technologies such as code-division, multiple-access (CDMA) and Global System for Mobile Communications (GSM), are interfaces that were developed for and optimized

for voice communica-tions. By contrast, LTE is optimized for data, and voice becomes an app. It’s an all-IP technol-ogy, and it promises to provide an access speed approaching 100 Mbps on the download.

Second, when it comes to transmitting video, LTE has an inherently lower latency compared with CDMA and GSM. With

the proliferation of smartphones and other video-enabled devices, more and more video is being carried by wireless facilities today than ever before. We’re not too far away from the picture-phone technology

technology

From a presentation by John Celentano

LTE and the Future of Wireless SystemsLTE is going to be the dominant air interface technology. Each carrier will migrate at its own pace depending on the consumer devices it offers, the markets it serves and its particular price points.

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Why LTE is Important Enables high-speed wireless

Internet connections Provides high data throughput

— nearly 100 Mbps D/L Offers low latency — important

for video Boasts optimization for all-IP

network — voice is an app Operates over different fre-

quency bands (700/800 MHz, Cellular, PCS, AWS)

Promises to be the air interface of the future

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July/August 2012 35

that AT&T talked about back in the ’60s, but the problem at that time was insuffi -cient bandwidth to make it feasible.

Third, LTE is optimized for all-IP networks. In the Internet age, all tele-communications services are IP-based, and LTE enables IP-based communica-tions in a wireless environment.

Fourth, LTE is not frequency-depen-dent. On the contrary, it’s frequency-agnostic. LTE deployments are planned across a number of frequency bands. We hear more about 700-MHz deployments because AT&T and Verizon use the band. But LTE is not limited to 700 MHz in par-ticular. Other carriers are exploiting LTE in Advanced Wireless Services (AWS) bands, and even in the 1900-MHz cel-lular bands. Depending on the frequency available to the carrier and the customers that they’re serving, LTE will fi nd its way across multiple frequencies.

Thus, LTE is the air interface of the fu-ture. All networks ultimately will evolve to LTE. The timelines for the evolution and the amount of investment required will

vary by carrier and by markets served. The degree of adoption of LTE also depends on the availability of devices that can support multiple air interfaces. Carriers that are in

the business today and that are considering LTE already have other services available on an installed base.

Migration by all carriers could take

Figure 1. Standards provide a migration path for carriers using other technologies to move toward and adopt LTE as their long-term platform for delivering high-speed services over their networks.

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technology

place in a few years, but it will happen because the standards defi ned in the various air interfaces that the carriers

use all converge in LTE and shortly thereafter, LTE Advanced (see Figure 1). The standards provide a migration path

for carriers using other technologies to move toward and adopt LTE as their long-term platform for delivering high-speed services over their networks.

Figure 2 lists some LTE projects that are under way. Progress varies by carrier. Verizon is moving from 3G CDMA, and its current technology is Evolution-Data Optimized (EV-DO). Verizon is adding LTE as an overlay. It won’t be long before Verizon will fi gure out how quickly it wants to move its CDMA customers to LTE.

Prudent deploymentAT&T has lagged a little bit, in part to

see how LTE plays out, and also pending the availability of the devices. The ex-perience that Verizon has gone through with a few network outages suggests it is probably prudent to take a little more time to fi gure out how this technology works, how it ought to be deployed, over what time frame and in what markets. AT&T comes at LTE from a different di-

John Celentano: “LTE is the air interface of the future. All networks ultimately will evolve to LTE. The timelines for the evolution and the amount of investment required will vary by carrier and by markets served.”

AG

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July/August 2012 37

rection: GSM-based technology. AT&T has high-speed packet access (HSPA) deployed today, and then again, AT&T is overlaying its network with LTE.

Sprint, with its Network Vision project, is using multiple technologies — CDMA and EV-DO for its primary customers, and it has customers using iDEN that it wants to migrate away from iDEN as part of its Network Vision project. The iDEN customers ultimately will be rolled into LTE.

Clearwire started with WiMAX. The company indicated that it will deploy LTE in markets where its network al-ready is up and running.

The secondary- and smaller-market carriers, MetroPCS, US Cellular, and C Spire, are CDMA and 1x carriers to-day, sometimes called 2.5G, but they’re talking about using LTE. These compa-nies bought spectrum in the 700-MHz band at the auctions that took place a few years back.

T-Mobile is in the mix for migrating its network from its HSPA deployment

to include LTE.There is a lot of movement among

the carriers involving LTE, and LTE is going to become the dominant air interface technology. But it’s going to take some time. Each carrier is going to be moving toward LTE at a slightly dif-ferent pace. The speed of each carrier’s LTE deployments will depend on what

consumer devices it offers, the markets it chooses for its network upgrades, and its price points.

John Celentano is a strategic marketing manager at Tessco Technologies, Hunt Valley, Md. His email address is [email protected]. The next AGL Regional Conference will be conducted in Seattle on Aug. 22 (www.agl-mag.com/events).

Major U.S. LTE Initiatives (2011–2015) Verizon — 3G (EV-DO) + LTE AT&T — 3G (EDGE/HSPA+) + LTE T-Mobile USA — 3G (HSPA+) + LTE Sprint — 3G (EV-DO) + iDEN + LTE Clearwire — 4G (WiMAX) + LTE MetroPCS — 2.5G (CDMA/1xRTT) + LTE US Cellular — 2.5G (CDMA/1xRTT) + LTE C Spire — 2.5G (CDMA/1xRTT) + LTE

Figure 2. U.S. carriers have projects under way to migrate their networks to LTE tech-nology. The pace of LTE build outs varies by carrier and by market.

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above ground level www.agl-mag.com38

The maximum permitted average load factor varies depending on the generator set’s rating, the specifi c application and the manufacturer’s recommended guidelines.

OOne of the important steps in sizing gen-erator sets for any application is to deter-mine the application’s average load factor. Understanding this parameter is essential not only for proper power system sizing but also for operability and reliability.

ISO-8528-1 limits the 24-hour aver-age load factor on most standby gen-erator sets to 70 percent of nameplate capacity. For utility outages lasting a few minutes or a few hours, one or two times a year, standby generator sets are designed to be loaded to 100 percent of nameplate capacity for the duration of the outage. However, if an outage lasts days instead of hours and the standby power system is loaded to 100 percent of its nameplate capacity, it is likely that the 24-hour average load will exceed the power system’s design parameters.

While running a generator set at an average load factor over 70 percent is unlikely to result in a catastrophic failure of the standby power system, it may jeopardize engine warranties, reduce re-liability and shorten the useful life of the generator-drive engines. It may also jeop-ardize the operation of mission-critical facilities where load factors are often high and constant. The following information reviews the concept of average load fac-tor and the calculations used to determine an application’s average load factor. It

standby power

Understanding Load Factor Implications for Specifying On-site Generators

By Brandon Kraemer

also suggests strategies to ensure backup power availability during extended utility outages and in applications with minimal load profi le variability.

Average load factorThe average load factor of a power

system is determined by evaluating the amount of load and the amount of time the generator set is operating at that load.

Because the loads are normally variable, the result is found by calculating mul-tiple load levels and time periods.

In Figure 1, a graph of a hypotheti-cal standby load profile, the 24-hour average load factor is derived from the formula shown under the graph, where P is power in kilowatts and t is time. Although the generator set is loaded to 90 percent of its standby rating for a por-

Emergency standby generator sets capable of an 85 percent average load factor have distinct advantages in critical data center applications. (Photo courtesy of MTU Onsite Energy)

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July/August 2012 39

tion of the time, the average load factor over time is only 70 percent because of the natural variability of the building load. In practice, it would be unlikely that a standby power system would be initial-ly sized so small as to require operating at 100 percent of capacity at any time during an outage. However, electrical loads are often added, and growing power needs may begin to tax the capacity of a standby power system. Any time that the genera-tor set is offl ine does not count toward the 24-hour average load factor.

High mission-critical load factors For most facilities with properly

designed emergency standby power systems, the possibility of exceeding a power system’s 24-hour average load fac-tor limitation is remote. This is because most commercial facilities have variable load profi les that reduce the likelihood that a power system’s 24-hour average load factor limitation will be exceeded, even during an extended outage. Many facilities also have noncritical loads that can be taken offl ine during extended out-ages to reduce the average load factor on the standby system, if necessary.

However, many mission-critical facilities have large, less varying loads that can severely stress standby power systems during an extended power out-age unless steps are taken during system design to accommodate the potential for a higher average load factor. Two examples of mission-critical facilities with high load factors are data centers and semiconductor manufacturing. In data centers, the computer servers and HVAC equipment create high electrical

loads that can vary little over time. Simi-larly, very high load factors are found in semiconductor foundries, where electric furnaces cannot be shut down without destroying large amounts of product.

As a result of these large, steady elec-trical loads, the load profi le in a mission-critical application is likely to have less variability, in turn putting a more constant demand on the standby power

Figure 1. The 24-hour average load factor (ALF) is derived from the formula shown under the graph, where P is power in kilowatts and t is time, in this hypothetical standby load profi le.

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above ground level www.agl-mag.com40

system. Less load variability results in a higher average load factor that will require either specifying a system with larger or more generator sets capable of a 70 percent load factor, or specifying generator sets capable of higher than a 70 percent load factor.

Figure 2 shows that although the generator sets are not loaded to 100 percent of their standby rating at any time, the average load factor dur-ing the outage is near 85 percent. In this case, the customer has taken ad-vantage of generator sets capable of an 85 percent load factor that can deliver more than 20 percent additional kilo-watts than generator sets rated to only a 70 percent average load factor.

Defi ning genset standardsStandards that apply to all generator

sets are those established by the Inter-national Organization for Standardiza-tion (ISO). ISO defi nes how to measure and rate many quality and performance parameters. All major generator set manufacturers utilize this standard to communicate their generator set rat-ings to their customers. In particular, ISO 8528-1 describes how to establish generator set ratings, measure perfor-mance and evaluate engines, alternators, controls and switchgear.

ISO-8528-1 sets a maximum 24-hour average load factor capability of 70 per-cent for both standby- and prime-rated generator sets, unless a higher average is agreed to by the engine manufac-turer. This means that a 3,000-kilowatt generator set meeting this standard must be able to provide an average of 2,100 kilowatts per hour over a 24-hour period. In emergency standby applica-tions, this means that the average load factor that can be sustained by most gen-erator sets over an extended outage of 24 hours or more cannot exceed 70 percent of the nameplate standby rating, a fac-tor that affects generator set sizing. In contrast, MTU Onsite Energy allows an 85 percent average load factor on emer-gency standby rated generator set mod-els above 200 kilowatts. For example, an MTU Onsite Energy 3,000-kilowatt generator set can deliver a 24-hour aver-age of 2,550 kilowatts — a difference of

standby power

Figure 2. Although the generator sets are not loaded to 100 percent of their standby rating at any time, the average load factor during an outage in this example is near 85 percent.

Figure 3. A typical load profi le for an ESP-rated generator set. The emergency standby (ESP) rating is the maximum amount of power that a generator set is capable of delivering, and it is normally used to supply facility power to a variable load in the event of a utility outage.

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July/August 2012 41

450 kilowatts. For certain applications involving multiple generator sets, this higher average-load-factor capability may reduce the number of generator sets needed to supply the load.

ISO-8528 defi nes categories of gen-erator set power output ratings:

Emergency standby (ESP) rating —The ESP rating is the maximum amount of power that a generator set is capable of delivering, and it is normally used to supply facility power to a variable load in the event of a utility outage. No over-load capacity is available for this rating. ISO-8528-1 limits the 24-hour average output to 70 percent of the name-plate ESP rating unless the manufacturer allows a higher average load factor. Figure 3 shows a typical load profi le for an ESP-rated generator set.

Prime-rated power (PRP) — A prime-rated generator set is available for an unlimited number of hours per year in a variable-load application, as long as the average load factor does not exceed 70 percent of the nameplate rating, unless the manufacturer allows a higher average load factor. This rating allows an overload capacity of 10 percent, but that additional capacity should not be used for more than one hour in every 12. The prime power rating for a given generator set is typically 10 percent lower than the standby rating. Figure 4 shows a typical load profi le for a PRP-rated generator set.

Continuous power rating (COP) —The continuous power rating is used for applications where there is no utility power and the generator set is relied upon for all power needs. Generator sets with this rating are capable of supplying power at a constant 100 percent of rated load for an unlimited number of hours per year. No overload capability is available for this rating. The continuous power rating for a given generator set is typically 25 to 30 percent lower than the standby rating. Figure 5 shows a typical load profi le for a COP-rated generator set.

Effects of load factorSpecifying standby generator sets with

a higher-than-average load factor capabil-ity can sometimes be a benefi t in mission-critical applications. System designers

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above ground level www.agl-mag.com42

standby power

may be able to reduce the size or number of generator sets by using units approved for 85 percent average load factor, as opposed to the 70 percent average load factor. For example, to design a standby power system to supply an average load of 11,000 kilowatts at a 70 percent average load factor would require eight 2,000-kilowatt generator sets. At a 70 percent average load factor rating, each generator set would be able to deliver up to a 1,400-kilowatt average, for a total capacity of 11,200 kilowatts over an extended outage of 24 hours or more.

8 x 2,000 kW x .70 = 11,200 kW

Using generator sets with an 85 per-cent average load factor capability would require only seven 2,000-kilowatt units. Each generator set would be able to de-liver up to a 1,700-kilowatt average, for a total average of 11,900 kilowatts over an extended outage of 24 hours or more. That amounts to an extra 2,100 kilowatts of effective generating capacity for ex-tended outages and a reduction by one in the number of generator sets needed.

7 x 2,000 kW x .85 = 11,900 kW

ConclusionThe load factor of any application af-

fects the design and sizing of the standby power system, but for mission-critical applications, particular attention must be paid to load factors because of these facilities’ minimal ability to reduce their electrical loads during extended outages. Although all major manufacturers of generator sets utilize ISO-8528-1 (which sets the average 24-hour load factor at 70 percent) as their standard, system de-signers can choose equipment that offers a higher average 24-hour load factor, which may, in turn, result in a system with smaller or fewer generator sets. In any case, specifi ers of standby power systems for mission-critical applications need to understand average load factor and its implications for business conti-nuity in the face of natural or man-made disasters.

Brandon Kraemer is an application engineer-ing supervisor with MTU Onsite Energy.

Figure 4. A typical load profi le for a PRP-rated generator set refl ects the common prac-tice that the prime power rating (PRP) for a given generator set is typically 10 percent lower than the standby rating.

Figure 5. A typical load profi le for a COP-rated generator set refl ects the common prac-tice that the continuous power rating (COP) for a given generator set is typically 25 to 30 percent lower than the standby rating.

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above ground level www.agl-mag.com46

tower market report

JJonathan Atkin, an equity analyst with RBC Capital Markets, made a presenta-tion to an audience at the AGL Regional Conference conducted in Las Vegas, collocated with IWCE. Edited for length and style, these are some of his remarks.

Carrier build out plans and operating trends involving technology overlays and leasing amendments, master lease agreements, new cell site additions and distributed antenna systems affect the prospects of tower companies. The tower segment is among four that I focus on; the other three are data centers, wire-less network operators and incumbent telephone companies.

Data centers include wholesale and retail operators along with Web hosting companies, so there is more variation within that universe of companies than there is within the tower or wireless model.

Towers have attractive drivers. Site leasing demand is fundamentally de-coupled from what’s happening in the broader economy. For example, in late 2008 during the recession, carriers still had to deploy what was left of their 3G build outs and get started on 4G and to keep growing their wireless businesses. And the wireless customers — they’re unhappy with the service. So carriers have to continue to invest in infrastruc-

ture, and wireless capex never went down. Wireless carriers have top-line revenue growth trends, but the towers never went down during that cycle. So towers have a very robust model with very predictable growth. Wireless capex

to year. But in aggregate, the industry spends about $20 billion a year and that hasn’t changed for quite some time. And

Operating andFinancial Trends

it doesn’t look like it’s going to change.Wireless operators may be less at-

tractive investments because of slow-ing growth rates, competitive pressures with penetration exceeding 100 percent, and most of the growth is coming from prepaid subscribers who represent less-

-nates, which makes the United States a little bit different from Europe. The U.S.

From a presentation by Jonathan Atkin

Investing in towers is a technology-neutral way to play wireless

when new gear goes on the tower, it doesn’t matter who’s deploying

U.S. Wireless Penetration: 100%

Broadband

Video

Landline Voice

U.S. Telecom Basics

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July/August 2012 47

AT&T31.4%

Verizon39.7%

Postpaid Share

Net Adds Mix

Drivers of Revenue Growth

T-Mobile11.5%

US Cellular2.4%

Sprint Nextel15.1%

AT&T10.4%

Verizon6.5%Prepaid Share

T-Mobile12.0% MetroPCS

13.1%

Leap Wireless8.3%

Tracfone28.5%

Sprint Nextel21.1%

% from postpaid subscriber growth 31.1%% from postpaid ARPU growth 37.7%% from prepaid subscriber growth 30.0%% from prepaid ARPU growth 1.1%

Source: RBC Capital Markets

Source: RBC Capital Markets estimates, company reportsPostpaid net adds

0.01Q11A

500

1,000

1,500

2,000

2,500

3,000

2Q11A 3Q11A 4Q11E 1Q12E 2Q12E 3Q12E 4Q12EPrepaid net adds

Internet/Datacenters (higher risk, higher reward) Positive — favorable demand/supply imbalance continues for most collocation providers Negative — capital intensive

Towers (lower risk, modest upside) Positive

Negative

Wireless PositiveNegative

Incumbent Telcos Positive — stable dividends Negative — typically underperform in a stabilizing/improving economy

Figure 1. Postpaid is still the key, despite greater subscriber growth in prepaid.

How Towers Are Positioned Within the Broader Investment Landscape

Wireless Players and Growth Drivers

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tower market report

operators did a better job of growing in a postpaid-centric fashion. But for the past two and a half years, prepaid has outgrown postpaid subscriber volume.

The wireline business is stagnating.

and that reduction is offset a little bit by broadband growth. The business is either a duopoly or a three-way com-petition depending on the sector: cable, satellite and telco.

As for capital expense (capex) spend-ing among wireless carriers, we have been seeing roughly low twenty-billion-dollar levels of spending during the past couple of years, and it is expected to continue. Beyond next year, AT&T and Verizon are likely to reduce spending

then, that will be taken up by T-Mobile

within its footprint. And then you can look forward to Sprint Network Vision really going full swing next year. It’s already happening to some extent, but in 2013, Network Vision will have a full year of impact.

Majority postpaidFigure 1 shows that growth of prepaid

volumes exceeded postpaid volumes even though postpaid still comprises the majority of subscribers and by far the

primary drivers are data growth among existing postpaid customers, an equal contribution from the remaining postpaid growth for Verizon and AT&T, and for

-umes are growing to such an extent that for carrier top-line growth, they probably

growth and postpaid volume growth.Smartphones form the majority of

devices sold by the postpaid carriers (see Figure 2). The prepaid side is becoming more indexed toward smartphone sales, principally Android and maybe someday

Wireless margins have been flat and sometimes down (see Figure 3).

Figure 2. Smartphone penetration trends for postpaid carriers.

Figure 3. National carrier EBITDA margins.

Figure 4. In a high-data-use market, a carrier may exhaust as much as 10 megahertz of spectrum per year. Unused private-market spectrum is available, such as spectrum owned or controlled by Clearwire and Dish Network. The potential exists for future auction of broadband licenses and further Advance Wireless Service licenses.

Source: RBC Capital Markets, company reportsAT&T Sprint Nextel T-Mobile Verizon Wireless Postpaid Sector Penetration

0.0% 1Q10A

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

2Q10A 3Q10A 4Q10E 1Q11E 2Q11E 3Q11E

17.4%

19.5%

24.2%

34.7% 35.8%

41.0%45.0%

50.0% 52.6%

45.6%

39.5%42.7%

35.4%

31.04%

19.9%

24.3%

28.5%

22.7%

27.0%

31.7%

39.1%

26.1% 26.9%

34.9%

37.9%

46.2%

33.4%

38.0%

42.7%

49.9%

36.4%

62.0%

54.0% 58.0%

Source: RBC Capital Markets, company reportsAT&T Sprint Nextel T-Mobile Verizon Wireless

0.0% 1Q11A

10.0%

20.0%

30.0%

40.0%

50.0%

2Q11A 3Q11A 4Q11E 1Q12E 2Q12E 3Q12E 4Q12E

43.7%

19.1% 16.3%

27.6%

41.1%

45.4%

19.5%

39.0%

7.6% 10.2%

36.9%

26.2%

41.3%

24.3%

17.6%

31.0%

43.7%

47.8%43.9%

26.6%

36.7%

46.2% 46.3%

28.9%

44.5%

46.5%

42.6%43.9%

8.3%11.2% 12.2%

31.0%

Source: RBC Capital Markets and company reports

MHz (avg. in top 100 markets)

AWS PCS

0AT&T

20

40

60

80

100

120

140

160

Sprint T-Mobile Verizon Clearwire MetroPCS LEAP

800 MHZ700 MHZ 900 MHZ 2.5 GHz (owned) 2.5 GHz (leased)

Smartphone Penetration Trends

National Carrier EBITDA Margins

Spectrum Overview

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Device-makers have much power over the wireless industry. Everybody wants the hottest device, and for a long time, the American consumer has been ac-customed to getting a subsidized phone — and even a relatively high-end phone — without having to spend more than $200 to $300. As a result, every time Verizon, AT&T or Sprint sells a smart-phone, they are about $300 in the hole in terms of the subsidy. It takes them more than half a year to make up that invest-ment. The subsidy on the device coupled with, in some cases, a sales commission is a real drag on margins, and it’s pre-vented the wireless carriers from making much headway on margins.

Spectrum hungerFigure 4 shows which company has

which radio-frequency spectrum — it assumes that Verizon will be be suc-cessful in acquiring SpectrumCo. It

to T-Mobile. Those are the two leaders, which you would expect, because they also have the most subscribers. Sprint and T-Mobile probably will need more spectrum sooner. Sprint may choose to leverage the Clearwire relationship. And T-Mobile will use the licenses it obtained from AT&T, but during the next several years, T-Mobile will have

through refarming some of its existing spectrum or making an acquisition.

In a large market such as Chicago, San Francisco or New York, a car-rier such as AT&T typically will burn through 10 megahertz of spectrum in a year. The need for spectrum continues despite the many spectrum deals that have been announced. Carriers with growth that increasingly depends on data and broadband will be on a con-tinual hunt for spectrum. Spectrum auctions probably will take place near the end of 2013 or in early 2014 for broadcast licenses that will be quite attractive. Some AWS spectrum, about 20 megahertz worth, remains, and it may come up for auction as well.

For carriers that can’t wait for auc-tions, there’s always Clearwire. Con-

tinuing discussions question whether somebody is going to lease or buy spectrum from Clearwire.

And the other interesting potential spectrum swap involves Dish Network’s 48 megahertz of contiguous 2-GHz

--

Squared. The spectrum may require a small guard band, but probably 38 mega-hertz of the 40 megahertz is fully deploy-able and contiguous, and it has relatively attractive propagation characteristics. It is not as attractive as broadband spectrum, nor the broadcast spectrum, but it’s avail-able now for the right price. So, all eyes are on Dish to see whether the company wants to build its own broadband network or lease or sell the spectrum.

Tower modelThe business model for tower own-

cost economics. Rent levels are known and well-established, and they typi-cally escalate at 3.5 percent a year. It’s a technology-neutral way to play wire-less capex. It doesn’t matter whether a

electronics or new software. And when new gear goes on the tower, it doesn’t matter who’s deploying it or what the

from a ground lease perspective and the other costs that go into operating expense (opex), which is probably less than $15,000 per site. If a tower has more than two tenants and has the poten-tial for three tenants (the average public tower company has an average of 2.75 tenants per tower), a tower company basically maintains money. The question then becomes not only is the tower busi-ness viable or attractive, but also what does it do with all the cash it generates? Buy land? Buy more assets? Buy back

American Tower went the dividend route when it converted to become a real estate investment trust (REIT) on Jan. 1, 2012. It looks as though Crown Castle International may convert to a REIT in a couple of years, and then SBA Com-munications a couple of years after that.

In 2011, Verizon and AT&T built out their 4G infrastructure. That continued in 2012. What’s new this year that’s in-cremental is Sprint Network Vision. And we may see the beginning of T-Mobile’s

will be some modest contribution from

Clearwire is doing is not very invasive and doesn’t trigger rent amendments.

Technology-neutral, carrier-neutral play on wireless network investment in response to data growth

Tower Business Model Basics

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Table1. The tower operators’ exposure by carrier — Sprint leasing exposure is more iDEN-centric for American Tower because of its SpectraSite acquisition and more CDMA-centric for Crown Castle and SBA Communications. Apart from the commercial providers, tower tenants include federal, state and local government agencies, and businesses such as utility, construction, courier, taxicab and private transportation companies.

Table 2. Wireless carrier site leasing activity includes data from prior years and a projection of leasing activity for 2012.

American Tower Crown Castle SBA Communications

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Depending on the vendor and depending on the market, some of what Clearwire is doing triggers a swap out of equipment or additional equipment on the site.

Table 1 shows public tower company exposure by carrier. For American Tow-er, the T-Mobile exposure is 7 percent, and 11 percent for Crown and SBA. SBA’s acquisition of 2,300 towers from Mobilitie, which has a healthy exposure to T-Mobile, will send the T-Mobile per-centage of revenue for SBA upward just in time for T-Mobile to start its build out and begin to move the leasing needle.

may position SBA quite well, partly as a result of its existing T-Mobile business and partly as a result of the T-Mobile revenue that it obtains via the Mobilitie transaction.

sites, but they are likely to have little effect on leasing demand.

The use of nontower infrastructure such as distributed antenna system (DAS) networks will continue for both outdoor and indoor coverage. Tower company interest in this business segment was highlighted by Crown Castle’s acquisi-tion of NextG Networks and Newpath.

Additional incomeGround acquisition by tower com-

panies provides them with additional real estate-based income and lessens exposure to a single owner. It provides a form of currency with ground owners.

The tower operating model compares favorably with most REIT categories, despite a lack of majority ground own-ership. American Tower converted to a REIT on Jan. 1, 2012, and Crown Castle is contemplating a conversion around

2015. The principle reason is tax strategy.A deal on the spectrum side that is

a little bit below the radar is the Dish Network E Block licenses. The 700-MHz licenses that Dish owns are geo-graphically complementary to licenses AT&T already owns. I would expect an AT&T-Dish transaction for 700-MHz band licenses to happen relatively soon and without much regulatory scrutiny. It involves only 6 megahertz. The licenses cover only part of the country, so it’s more of a tuck-in transaction that seems fairly intuitive. And that would be in contrast to buying S-band spectrum, which is 40 megahertz and which would have more procedure barriers.

Table 2 shows carrier site leasing activity from 2004 through projections

when EV-DO became highly relevant,

Table 3. Wireless carrier site leasing activity includes data from prior years and a projection of leasing activity for 2012.

Carrier 4G Activity Timelines

Carrier 2010 2011 2012 2013

Verizon

AT&T

T-Mobile -

Clearwire

Sprint

-

Metro PCS

Leap Wireless

US Cellular

AT&T

Clearwire

Metro PCS

US Cellular

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tower market report

granular, not only for new sites but also for overlays because some overlays trigger meaningful lease amendments.

amendments in broadband-equivalent (BBE) terms or the lease equivalent of an overlay, which is typically a quarter to a third of a lease. In a healthy year, you’ll see 20,000 new sites or lease equivalents added by the entire wireless industry. And in a mediocre year like we had last year, it might be more mid-teens.

We expect more leasing this year com-pared with last year because of Sprint as an incremental driver and AT&T and Verizon as the dominant drivers. Next year, AT&T and Verizon leasing will wind down a bit, and Sprint will be contributing the full year’s worth of Network Vision site leas-ing. T-Mobile will have a full year of site leasing, and then we’ll have to see what happens with the S-band. Whether Dish builds out on its own or whether some-body else builds out those licenses, the build out for S-band licenses will deliver

Table 3 places carrier 4G activity on

it will have the majority of the major

population and even secondary popula-tion centers covered by the end of this year. Sprint expects to cover 120 million pops by the end of this year and maybe 100 million pops by the time the next

-cur in the fall or in the early winter. With those two bookends, Sprint may end the year at 120 million pops. We have Verizon ending the year at mid- to high-200-mil-lions of pops. AT&T will be somewhere in between, and T-Mobile would bring up the rear. I don’t know if T-Mobile will have any markets launched, but it probably will be deep in deployment mode by that point.

Clearwire already covers its foot-print, which is 130 million pops, with WiMAX. It’s not going to expand its markets but it’s going to overlay its larger cities within existing markets

Clearwire, some of which triggers lease amendments and some of which doesn’t. It depends on the vendor.

US Cellular is a secondary or tertiary

is going to end the year at about 20 million or 25 million pops.

Sprint Network Vision is the big incre-mental driver this year. Table 4 lists major markets and when they are going to be constructed. Six are set to be launched in

be launched on fully deployed networks.

-tion date is post-launch because Sprint wants to satisfy customer demand and to some degree investor demand to launch markets when their deployment passes the 50 or 60 percent mark for coverage.

LTE and battery lifeThere are different philosophies in-

Verizon users with Android phones that

life really go south on those multimode -

ber of markets mid-year and in the fall. Its philosophy was to launch on a more mature network. The company actually delayed some commercial launches of

coverage because experience showed that when the phone cycles back and forth between 3G and 4G, that’s what drains the battery as much as anything. By waiting, AT&T minimized the risk of disappointing customers about device battery life.

By the time Sprint launches in mid-2012, it will be interesting to see whether the company repeats Verizon’s mistake and its customers have battery-life prob-lems because the Sprint markets will be only 50 to 60 percent deployed or whether advances in device technology will over-come the problem.

On balance, national tower companies have towers where you would expect them, to follow population distribution. But for historical reasons, because many tower companies started in certain regions where they acquired towers from carri-ers, the results of those transactions gave them an overweighting. Crown and SBA are a little bit more indexed toward the Southeast but clearly they’re both national

[email protected].

Table 4. Major markets where Sprint Network Vision will be a big incremental driver for site leasing activity this year have completion dates extending into 2014. The initial six LTE market launches do not represent complete markets. Instead, 50 to 60 percent coverage is likely to be reached in most markets when they launch at mid-year 2012. Partial coverage raises possible battery-life issues with wireless devices.

City Estimated Completion Date

Sprint Network Vision – Market Timeline

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tower market report

RRepresentatives of an investment bank, a private equity fund manager and two companies that own and operate towers spoke at the Tower Technol-ogy Summit in New Orleans. Here are some of their remarks, edited for length and style.

Clayton Funk: Where do you see valuations in the marketplace?

Larry Harris: The market has been very strong. The year 2011 probably is a year I would like to forget because with the overhang from the AT&T/T-Mobile USA merger there were many reasons not to do a deal. Almost the instant the merger was called off, our perspective on buying was trans-formed. During 2011, we had to be a lot more selective because of the potential risk of some of that overlap, even though no one knew exactly how the merger would play out.

The iDEN overhang remains, but a lot of the rest of the uncertainty is behind us, and the market is strong. If you have sites, if you have markets to

that is interested in buying them at or near historic high valuations.

Clayton Funk: Howard, you have had some exits from some of Pep-pertree Capital’s investments and portfolio companies. How do you see the valuations?

Show Me the Money:How Much Is My Tower Worth?

By the AGL Staff

Among other things, tower valuations depend on capital availability, interest rates, ground lease control, lease-up potential, lease language and documentation. Current factors favor overall high valuations.

Larry Harris: “If you have a tightly zoned site with a single tenant, as you add tenants, you’re going to see multiples come down because then much of the growth is behind that site. If it is a four-tenant site and it has two tenants on it, it already has achieved 50 percent of the potential that it could ever have.”

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July/August 2012 55

Howard Mandel: Valuations are strong now. There was a lull in the market just because of the ambiguity when the AT&T/T-Mobile USA merger was pending. The markets are at a big number. We are pleased with where they are.

Clayton Funk: How long are the high valuations going to continue?

Larry Harris: The multiple is a function of growth. If you’re listing a single-tenant tower with opportunities for future lease-up, you’re going to get a multiple that doesn’t make sense in any other industry. But we all know the dynamics of this business. You build

and you suck wind until you get your second tenant, and all of a sudden you have to contemplate whether to hold on to the tower or sell it because now, for the initial investment made, it is a very attractive return.

Carriers have their choice, and de-velopers have to be patient. You can

are going to have to have this site, so you get out in front.

a single tenant, as you add tenants, you’re going to see multiples come down because then much of the growth is behind that site. If it is a four-tenant site and it has two tenants on it, it al-ready has achieved 50 percent of the

potential that it could ever have. If your friend who sold a tower got

a different multiple, there is a reason. The price is a factor. It is harder to grow a million-dollar asset than a $250,000 or $300,000 asset.

Clayton Funk: Howard, what do you think about valuations in the next six months to a year?

H o w a r d M a n d e l : T h e prices that folks like Larry pay now are almost i r re levant be-cause the way the market val-ues assets is in hindsight. We’re going to look at that asset three years down the road and say, “We picked up two tenants, so we didn’t pay 24

In hindsight, we only paid eight

can drive anything down into that kind of range, it’s going to be hugely accretive.

It goes back to the huge macro

trends of how much data capacity it will take for the mobile networks to serve their customers. We’ve all seen the AT&T chart and know what that looks like. If you believe the chart, the multiple you’re paying for towers is almost irrelevant. Whether you pay

don’ t be l i eve i n t h i s , t h e n you shouldn’t be paying the 24 times or 26 times. You’ll end up with the same result.

C l a y t o n Funk: Bill, your company had a recent sale of t o w e r s . H o w would you see the valuations of various sites dif-fering from one another? When you sold your por t fo l io , d id you see certain types of sites be-

ing valued higher than others? William Wade: We spent much

time leading up to our sale wondering whether intrinsic stick value or the

F. Howard Mandel: “The prices that folks like Larry pay now are almost irrelevant because the way the market values assets is in hindsight. We’re going to look at that asset three years down the road and say, ‘We picked up two tenants, so we didn’t pay 24 times

that kind of range, it’s going to be hugely accretive.”

R. Clayton FunkSession ModeratorManaging DirectorMedia Venture Partners

Larry HarrisVice PresidentMergers and AcquisitionsSBA Communications

F. Howard MandelPresidentPeppertree Capital

William WadePresident and

Central States Tower

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tower market report

56

tower market report

ends up being both. We tried to have a portfolio with a blend. It happens al-most by default; it is what you end up with after 18 to 36 months of building the portfolio. At certain times, there

and then there are certain towers that have a lot of lease-up potential that helped to determine the value of the tower.

Everyone seems to have their own formula for assessing value. They all tend to roll to the same point, but they get there by different methods.

Clayton Funk: Valuations are tied to interest rates. As interest rates go up, valuations go down. Do you have predictions on when that would happen?

Larry Harris: If interest rates go up and we are locked in at 3 percent on our escalators, there could be confu-

is better access to capital among the aggregators and at much lower rates than we have ever seen. You’re see-ing many investors trying to get into the business. We probably can fund more opportunities than we can get our hands on. Because of that access to capital and because many investors are interested in the tower business, we’re in one of those periods when we cannot do a lot that is wrong. Deals get announced, and the public companies are rewarded for them.

and say, “I really shouldn’t have done

that these deals did justify the valu-ations. Availability of capital and in-terest rates has caused investor desire to get into the business. That is why we see the valuations supercharged right now.

Howard Mandel: It’s the cost of capital and we’re concerned about in-terest rates, but even more so the thing that keeps me up at night is concerns

-dustry is that if we don’t add tenants — and we do add tenants — we know we are going to make 3 percent more next year. That’s great, unless our dollars are worth 4 percent less next year. If there is a thing that could really mess the thing up, it’s those macro things you see in the market right now with the government spending too much

Clayton Funk: Fifteen years ago, many leases were written with carri-

consumer price index, whichever was higher. Does that ever enter into ne-gotiations with carriers?

William Wade: Most of the lan-guage dealing with building towers has something in there. Absolutely, the CPI is still out there and is a factor.

Clayton Funk: Would it be some-thing for tower owners to start looking at putting back into leases if they can?

William Wade: We almost prefer -

have a CPI escalator clause, and then, what it is for that particular part of the

percentage. There are occasions when maybe we have left money on the table

for our side it makes sense for us just

Howard Mandel: In the past, you had not left money on the table. In our company standard leases, we ask for a CPI escalator and almost never get it, for the reasons you’re citing. It’s too much of an administrative burden for the tower companies and for the carriers. I would suggest that if people can include as an escalator clause the higher of 3 percent or CPI,

they should.Clayton Funk: The tower market

is hot. Valuations are at historic highs. It has been on a run like this for a little bit with a bit of a blip last year. I don’t know if anyone else had the deer-in-the-headlights look last year on Sunday after the announcement of the AT&T/T-Mobile USA merger, but the announcement caused a drop in valuations for a little while. How have things changed from last year? What are the lessons learned from that period of threats of decommissioned

Larry Harris: “What’s important to know if you’re a tower owner or tower operator, or if you aspire to be a tower developer or own a tower, is that with the contracts you write with the carriers, you want to

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tower market report

sites and overlap risk?Howard Mandel: We once were

-nies don’t hang on to towers for our grandchildren. If you don’t fall in love with the assets, then you have less of a concern like that. Our companies sell towers along the way. Don’t put

all your eggs in one basket. You don’t have to have 1,000 towers. You could sell 10, you could sell 50, and not bear that risk; let Larry bear that risk.

Larry Harris: What’s important to know if you’re a tower owner or tower operator, or if you aspire to be a tower developer or own a tower, is that

with the contracts you write with the carriers, you want to be as equipment-

possibly can.When AT&T and T-Mobile an-

nounced a merger, we looked at which sites we were acquiring that had an overlap with the tenants. If the

William Wade: “For smaller tower companies,

the time, we’re just happy to have the opportunity to build a tower, and if we start trying to drive a harder bargain and dictate terms, many times the project won’t happen and opportunities go away.”

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July/August 2012 59

developer who owned the tower had

could not remove an array of antennas under one lease and put it back under another lease, everything was good. We would enforce the lease, and even though they may merge, as a company they have to come back to me and say, “I want to take this one down and

Mobile network operators usu-ally don’t take down antennas. They usually turn six antennas into nine or nine antennas into 12 before they take the other antenna array down, so you get some kind of amendment. If the leases are equipment- and frequency-

When leases are not equipment- and frequency-specific, changes to the mobile network are a concern. You’ve heard of Sprint Network Vision. The equipment-makers are marketing new equipment to Sprint that allows more than one technology to operate on the same antenna at different frequencies. That’s not good for the tower owners in general unless you have something

their ability to do that. It took a lot of forethought to write that into a lease 10 years ago before the technology

might not be there in older leases. But it is something you can look to put in leases from now on to make sure car-riers don’t have the ability to sublease your tower space through their extra-turbocharged, highly technologically

De facto subleasing is a real busi-ness risk. Sprint, through its partial ownership of Clearwire, through its iDEN, through its CDMA, and through LightSquared, was putting four tech-nologies on one array, when those were four separate leases before. It is some-thing to defend against the best you can.

Clayton Funk: Bi l l , did the AT&T/T-Mobile merger announce-ment change your investors’ view when looking at developing towers?

William Wade:

in December 2010, and the proposed merger was announced in March 2011. We came to terms with it. We understood that there might be one less national carrier. It may have ad-justed the overall upside on the exit,

but I don’t believe it lessened any one of our investors’ opinions about the tower industry.

As I learned during nine years with AT&T Wireless, even when we acquired new networks, the RF engi-

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neers didn’t like to give up cell sites. Where proposed merger partners had towers in close proximity to one an-other, I remember the expectation from Wall Street was that there would be a decommissioning of a lot of towers — after Cingular and AT&T merged, for example. There was disappoint-ment that there were still more towers in the portfolio than they expected, because the operating expense hadn’t come down.

But it was largely because — and wisely so, looking back now — there is just always a need for more sites, whether it’s a capacity issue, or an offload issue or maybe now a Wi-Fi offloading issue. So the AT&T/Cingular merger, to my knowledge, didn’t cause the decommissioning of the number of towers that many expected it to.

T-Mobile and AT&T did have some

instances where they each had anten-nas on separate towers in somewhat close proximity, we didn’t expect de-commissions at the rate others might have. Where T-Mobile and AT&T had antennas on the same structure, there may have been reason to expect more decommissioning, but it still was not a given.

Howard Mandel: Our companies don’t charge for tower space by the carrier, they charge by the radiation

center. One of our companies has a tower in Florida where AT&T has three rad centers on it. They get charged three rents. Whether it’s AT&T, or AT&T and T-Mobile together, or AT&T and T-Mobile apart, they still have to have enough equipment to cover their subscribers. And all of their subscribers were complaining about their service before the merger. Afterward, magically, the equipment they have on one of their systems isn’t going to cover it.

Clayton Funk: We covered interest rate risk and merger risk. Do you see any other risks to current valuations?

Larry Harris: The antenna shar-

Carriers are just starting to deploy that technology. I wouldn’t imagine that

in sharing their networks with anyone because they have a big lead. I would expect — and we’re seeing it with Sprint as it plays catch-up — ways to lower operating cost by having more

maybe even sublease them.You would hope that carriers are

more interested in building out their networks and meeting their customer

last dime out of their tower leases. But that is a broad risk.

iDEN churn is a broad risk. It is some-thing we look at when we price deals.

With the availability of capital, many more people are coming into the business who are willing to invest in towers, and that makes it a strong business.

Now, when carriers sign leases, they make sure they get their 4G equipment. If Bill were building tow-

or three years ago, they didn’t have their 4G strategy fully formulated. They didn’t know what their arrays were going to look like, what brand of antennas they would use and how many dishes they might need. They know that, now.

If you’re doing a build for a carrier today and they are signing that lease at the same rate, say an average of $1,850 a month for an anchor tenant on a new tower developed for them, that $1,850 also gets them their 4G equipment. If

$1,850 got their 2G and 3G equipment on it and they since have amended that lease, maybe now it is $2,200 a month instead of $1,850.

Thus, when you build a tower to-day, you lose out on the opportunity that you had before.

William Wade: There was a quick learning curve as the carriers got hit

and then to LTE. Now, the lease re-quest is for everything in the world

From left: F. Howard Mandel, Peppertree Capital; William Wade, Central States Tower; Larry Harris, SBA Communications; and panel moderator R. Clayton Funk, Media Venture Partners.

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tower market report

above ground level www.agl-mag.com62

tower market report

ground owner defaults to him, you can keep your tower there. This used to be relatively unimportant. It became highly important when the real estate market crashed a few years ago and suddenly many properties were not only under water [valued at less than their mortgage balances] but grossly under water. If you prepaid the rent of if your rent was low, you have a mortgage-holder to your landlord who now has a mortgage with a balance higher than the land value. There is every chance the mortgage-holder will foreclose and kick you off the property.

We’ve never seen it happen. No one would put a tower on the property if there were a better use for the property. Towers are beautiful, but property owners tend to put a McDonald’s res-taurant or a shopping center or an of-

they can, but even still, it is important at the outset to obtain a subordination, nondisturbance and attornment agree-ment from the land owner because it will hurt you on the tower value on the

right out of the gate. We affectionately

antenna they want to install. We don’t mind it as much if we

know about it when we are building the tower because we can structure the tower for that. It’s different when a second tenant comes onto the tower as a collocator. There is room to negotiate a better lease with that second tenant because we didn’t build the tower spe-

No one saw 4G coming. Maybe there is something more coming that no one anticipates insofar as equip-ment on the tower is concerned. There may be that sort of an opening as well, two or three years from now, with the next iteration of different technology.

Clayton Funk: What are some things tower owners could be doing now to enhance the value of their sites?

Howard Mandel: The legal docu-ments matter. The aggregators some-times come across minor issues when buying towers that indicate the tower developers could have done it bet-

refusal in the ground lease so when the pirates come and try to buy up the ground, our guys have the right to try to buy it. That’s valuable to the aggregators.

We used to ask for a 25-year lease, including all of the renewals. We used to think 25 years was plenty because the business was a two-year play — we would be long gone by then. But now, we ask for 40- and 50-year leases. The ground owners don’t blanch at all. Why not ask for it? Whether they are giving the lease for 25, 40 or 50 years, it is all the same thing.

Larry Harris: The equipment compound is important, although some of the equipment is beginning to get smaller and smaller with grounding

always is a need for more space. If you build a four-tenant tower, make sure there is enough land to put four tenants there.

Howard Mandel: If your ground owner has a third-party lender, you want to obtain consent from that third-party lender such that even if your

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July/August 2012 63

back end if you don’t have it.William Wade: For smaller tower

companies, writing into the leases

advice from the aggregators and other potential buyers of our towers. Half of the time, we’re just happy to have the opportunity to build a tower, and if we start trying to drive a harder bargain and dictate terms, many times the project won’t happen and opportuni-ties go away.

Don’t feel like you’re falling down as a tower developer if you’re strug-gling with those terms because you are going to be spoon-fed some of the contract language in exchange for the opportunity.

Regarding tower valuations and how to improve them, the subordina-tion, nondisturbance and attornment agreements are important, and we’ve experienced every one of the risk items that were mentioned.

Secure a big lease area so the buyer of your tower doesn’t have to go increase his ground rent to add a second, third or fourth carrier. Get as big a space as you can.

Where we could buy the land or obtain a 99-year easement on the land, it really made a big difference

of towers. That may be obvious, but

operating expense on the site makes your tower much more attractive to a buyer. If you can take the extra time to work with your landlord on that or set up a lease with an option to purchase, that really helps.

Strong, clean leases are important. Documentation is important when you present your portfolio for sale. Buyers appreciate it. If you can show exactly what you own and exactly why it is

of that location are and present it in a nice box with a bow on it with every document they would ever ask for, that helps. The way you present your portfolio and your tower company — the more professional, the more docu-

mented and the more thorough — only

Tower Technology Summit, which in-cludes a conference and exhibition collo-cated with CTIA Wireless, is produced by

analysis source owned by UBM TechWeb, a part of UBM, a global provider of news dis-tribution and specialist information services. AGL produced the conference programming for the Summit. For more information about the Summit, visit www.towersummit.com.

Photographs for the article were taken by Don Bishop.

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above ground level www.agl-mag.com64

tower market report

TThe wireless industry and its related wireless infrastructure subsector have

year; however, much has remained the same. The shared wireless infrastructure

for future growth as existing voice and increased data and mobile video use

forecasts wireless network data usage

from 2011 to 2016 (see Figure 1). We’ll examine what has changed during the

the shared infrastructure and the wire-less industries.

Towers, rooftops, DAS and backhaul

shared wireless infrastructure industry. -

cal real estate for wireless telecommu-nications carriers and broadcasters. A

commercial and, occasionally, multi-

-

of antennas. A third niche, distributed -

resents what historically was a last-resort technology. Many carriers now

Trends and Forecasts for the Wireless and Tower Industries

in the toolbox for achieving desired

wireless infrastructure, including wireless backhaul (microwave) and

By R. Clayton Funk and Jason Nicolay

Wireless / Towers: Then vs. NowGlobal Mobile Data will Increase 18x from 2011 to 2016

2011

0.6 EBper mo

1.3 EBper mo

2.4 EBper mo

4.2 EBper mo

6.9 EBper mo

10.8 EBper mo

Exab

ytes

per

Mon

th

0

2

4

6

8

10

12

2012 2013 2014 2015 2016

78% CAGR2100-2015

according to Cisco Systems’ latest estimates.

modify and amend their existing leases and seek new sites to collocate on

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July/August 2012 65

Originally, almost all of today’s shared wireless infrastructure niches

to market and consumer demand for wireless services are the catalysts for installing more shared facilities. More niches, such as small cells (femto-

not changed is that the shared wireless infrastructure industry attracts investors

AT&T, Verizon and others commit to long-term contracts that generate recurring revenue streams.

their assets.

for investors to continue to commit -

tive return on investment.

for antenna sites and changes to existing sites. They chafe at the limited access to

Meanwhile, carriers themselves have to overcome their own barriers such as

building out a network, even on a limited scale, can cost millions and even billions of dollars, so access to and the availability

-mercial service.

Tower owners have an ability to lever-age their assets because of the recurring,

The long-term agreements with national

-

the churn rate among their renters low.

in the country, access to both debt and

be easier and more abundant.

Acquisition pool

-

a large number of smaller entities. With

exit to a larger consolidator at a future date.

encouraged by the fact that the wireless industry’s fundamentals continue to be sound.

although economic turmoil in the Euro-

housing market’s downturn affected lend-

rates. These favorable conditions have translated into more businesses and in-

the uncertainty and tight credit of the most recent recession; however, unlike many of

shared wireless infrastructure was and is more resistant to swings in the economy. As a result, several tower owners were able to secure new credit facilities. Access

Wireless trends

trends, there are key areas to watch

shared wireless infrastructure industry is headed. First, continue to watch the

wireless carriers. Key metrics include their subscriber growth, the average

leverage

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above ground level www.agl-mag.com66

tower market report

among their heavy-data-using subscrib-

markets and take note of the availability

-ants who are under long-term contracts

Wireless carriers continue to see their own headwinds in growing their businesses as they relate to voice tele-

move away from unlimited offerings in -

sector dominated by Verizon and AT&T.

number of consumers turning to tablets and e-readers, carriers who can offer re-liable, fast networks for data usage have been able to grow their market shares. Given that AT&T and Verizon are the

is a good barometer for the wireless industry.

Subscriber additions

adding 726,000 net wireless connections for a total of 103.9 million total con-nections, while Verizon added 734,000 net wireless connections for a total of 93 million retail customers. AT&T re-

187,000 to reach 69.4 million, while -

as e-readers like the Kindle and Nook in addition to iPads continue to boost both AT&T’s and Verizon’s net additions and served to attract new subscribers desiring access to the latest consumer wireless devices.

-tional revenue from sources other than voice customers if they are to grow or

as of March 31, 2012, an increase of

-lion of its wireless revenue is derived from data services, an increase of nearly

-lion, and data revenue now accounts for

metrics indicate that both AT&T and Verizon continue to shift away from

AT&T/T-Mobile mergerOn March 21, 2011, industry heads

-nouncement for AT&T and T-Mobile, the nation’s second- and fourth-largest

was successful in gaining traction

a result, on Dec. 20, 2011, AT&T an-nounced it was abandoning the merger

and a favorable nationwide roaming agreement.

With the failed merger between two

it, the wireless industry turned its at-tention to new headline-grabbing deals

including tower owners, are awaiting the outcome of Verizon Wireless’ recent

-

it is important to keep in mind that there are large fundamental differences between the characteristics of the industry of today and the characteristics of the industry of more than a decade ago.

Wireless / Towers: Then Versus Now

Then NowDecember 2000 December 2011

Subs (in millions) 109 332Penetration 38.9% 104.6%MOUs/Month/Sub 309 595MBs/Month/Sub NA 761ARPU $52 $47EBITDA Margin 26.7% 29.8%

Then NowDecember 2000 December 2011

Cell Sites (Estimated) 104,288 283,385Tenants Per Tower 1.5 2.4EV/EBITDA 28.6x 18.0xLeverage 10.4x 6.8x

Wireless

Towers

Sources: Media Venture Partners and CTIA

Penetration 38.9% 104.6%

MBs/Month/Sub NA 761

EBITDA Margin 26.7% 29.8%

Leverage 10.4x 6.8x

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July/August 2012 67

that deal with two transactions for addi-

-

-nouncement of failed merger discus-

2012. Further adding more drama to

merger front were rumors of merger discussions between T-Mobile and

acknowledgement of merger discus-sions between the two carriers, it is not unrealistic to believe there will be

Four wireless carriers and the national -

less carriers. Future consolidation will

the need for additional wireless network

The overall good news is that today’s fundamentals for the wireless infrastruc-ture industry differ widely when com-

decade ago (see Table 1 and Figure 2).

LTE (Long Term Evolution)

-erators choosing to move down the

-works to handle the growing number

strain on and bringing attention to the wireless carriers’ networks. Verizon is using 20 megahertz of unencumbered

-

-

end of 2013. Other carriers including

-

The tower deal environment

annual AGL

-cially towers, has been incredibly ro-bust for valuations. Nearly every tower

-folios of underlying ground leases. The deal environment remains extremely

driving strong demand for nearly all

Every deal is different, and various

-though circumstances can vary for each transaction, as a general guide, most deals for telecom towers these days are getting done at historically high

-cast towers, government-owned towers and older, more rural microwave towers

telecom towers are bought and sold, but even those are achieving historic highs.

handful of tower deals involving more

--

Plateau Wireless entering into a sale-leaseback with American Tower, and

largest announced transactions. Other notable recent transactions related to the

Trends In Usage Patterns

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above ground level www.agl-mag.com68

tower market report

tower and shared wireless infrastructure

of underlying ground leases or carrier -

amortization) for a few years. Although

to macroeconomic conditions in 2008,

-

-tial recovery. As of May 18 this year,

traded at an average of 18x 2012E

-

have “buy” or “overweight” ratings

carriers continue to drive growth for tower and other shared infrastructure

market are consistently watching wire-less carriers for any signal of decreased

4G network build out. As a result, tower

-

and suburban markets where the carriers are initially focused on building their 4G networks and securing additional

-

Verizonmarkets in December 2010 and covers

-

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July/August 2012 69

ditures or 53 percent of the company’s first-quarter capex total. Verizon’s wireless capex dollars are largely spent to enhance its current network and to further expand its use of LTE technology throughout its entire 3G footprint by the end of 2013.

AT&Tresults that it plans to spend nearly $20 billion in total capital expenditures during 2012. As of March 31, AT&T had already spent nearly $2.3 billion or 12 percent of its total capex on wireless-related capital expenditures. AT&T’s wireless capex dollars are being used for network capacity and expansion and for the company’s 4G LTE deployments. The carrier has used the capex dollars to cover more than 260 million pops with its 4G network, which includes a mix of both LTE and HSPA+ services.

T-Mobile announced a refocus of its Challenger Strategy in February 2012 after it failed to merge with AT&T.

and progress have been toward its $4 billion network modernization and 4G evolution effort, which will improve the carrier’s voice and data and will push it toward LTE service in 2013. T-Mobile

has signed agreements with two vendors to deploy LTE-capable equipment at 37,000 cell sites during 2012 and 2013.

company spent $747 million in capex toward the network goals.

Sprint continues to focus on its Network Vision project, which con-solidates network technologies (CDMA and iDEN) while reducing the number of sites the company uses. During the past year, Sprint selected LTE for its 4G migration path. The company’s LTE net-work is expected to be launched in 2012 and to cover more than 123 million pops. Sprint will add coverage in 2013 to reach between 250 million and 270 million pops by the end of the year, a step that will be further enhanced with Sprint’s access to Clearwire’s LTE network. The company projects it will spend $6 billion altogether in capital expendi-

Sprint spent $710 million in wireless capex, which was 89 percent of the company’s overall capex for the period.

Clearwire, whichWIMAX network in conjunction with Sprint, has announced it plans to deploy a TDD-LTE network that is expected to

be launched in June 2013. The company, which provides wholesale services for Sprint and Leap, expects to deploy its LTE and VoLTE equipment at 5,000 base stations by next summer in New York, San Francisco, Los Angeles, Chicago and Seattle.

Leap stated in its first-quarter earnings announcement that it spent $146.3 million in capital expenditures so far in 2012. The company estimates it will spend between $600 million and $650 million in capex for the full 2012 calendar year. Leap is using its capex dollars to maintain and develop its cur-rent operating footprint. The company said it is happy with its LTE launch in Tucson, Ariz., and it plans to deploy LTE for about two-thirds (or roughly 25 million pops) of its network in the next two to three years. At an esti-mated cost of less than $10 per covered pop, Leap estimates it will cost about $250 million to build out its LTE network.

MetroPCS,to launch LTE, has largely completed its LTE deployment throughout its 14 mar-kets. Despite nearly completing its 4G network build out, the carrier estimates spending $900 million to $1 billion in

Figure 4. The historical enterprise value to EBITDA (12 months forward) shows how the multiples for four tower companies have

Source: Media Venture Partners and Wall Street research

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tower market report

US Cellular,earnings announcement, stated it ex-

-

C Spire (formerly Cellular South),

Out with the old, and in with the new. LightSquared,

new wireless entrant. Cox Communi-cations,

wireless efforts and has since sold al-Open

Range,

sold all of its assets.-

CenturyLink,

-

minimally build out its licenses in order

Dish Network has been actively lob-

wireless broadband services. Although

Advanced network remains uncertain,

be unable to launch its network until 2016 or later.

generation of networks and various

Figure 3 for a timeline of select carriers’

scheduled 4G network build outs.

Credit environmentAlthough the latest recession was

challenging for most industries, access

American Tower obtained more

-ber 2021. Again, in March 2012, the

Crown Castle, which has not issued

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July/August 2012 71

revolving credit facility and term loan

- SBA Communications has not is-

sued any new senior debt or entered into

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AGL conferences coincide with state wireless association functions, allowing you to attend two events for little more than the price of one. Held in seven strategic locations throughout the year, they provide easy access for you and other industry professionals in the immediate area and in surrounding states.

AGL conferences feature AGL magazine authors and other local and national experts, whose industry knowledge can help you shape your business for the future.

The single-day conference schedule takes less time away from work, and with registration fees of only $95 per person, the low cost lets you bring more managers and employees.

Register today at www.agl-mag.com/events

West – Las VegasFebruary 24Las Vegas Convention Center

Northeast – PhiladelphiaMarch 9Philadelphia Airport Marriott

East – Bethesda, MDApril 13Bethesda Marriott

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Northwest – SeattleAugust 22Seattle Airport Marriott

Midwest – DetroitSeptember 21Detroit Marriott Southfield

Southwest – DallasNovember 9Dallas Marriott City Center

To learn how sponsoring and exhibiting at AGL Regional Conferences can benefit your company, contact Traci Gregory at (949) 493-2320 or via email at [email protected] the Fiber Puzzle

The Official Mobile Site Sponsor

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tower market report

July/August 2012 73

secondary public offering in order to fund recent acquisitions.

With access to the overall credit mar-ket continuing to ease and the Federal Reserve Board announcing that rates will remain low until at least 2014, pricing re-mains higher than it was before the credit crisis, with many lenders seeking higher upfront fees, floors on LIBOR-based loans, and 100 to 200 basis points in in-creased spreads. Public tower companies are continuing to utilize their access to the capital markets to issue new notes and repay older ones nearing maturity in order to extend maturity dates.

The futureThe wireless industry endured the

latest turbulent macroeconomic period well, as consumers have come to view wireless communications as a neces-sity instead of a luxury or option. The tower market was and will continue to

industry’s strong staying power and, as a result, it has proved to be fairly insu-lated from macroeconomic issues. The volume of tower deals, although slightly sluggish during the past 12 months, was able to make up ground with sizeable transactions, including a number of portfolios for underlying ground leases, a major DAS network provider and one of the largest private equity-backed tower providers. However, 2012 could shape up to be an extremely robust year for transactions as sellers start to weigh the threat of capital gains taxes increas-ing at the beginning of 2013. Tower owners considering selling some or all

of being in a seller’s market because of the limited inventory on the market and the deep pool of interested buyers. The wireless industry, overall, has the underlying characteristics of being a long-term winner as wireless voice, data and mobile video use do not show any signs of decline.

Trends continue to show a move toward everything wireless. There is a growing market for companies devel-

-less users, including mobile apps and

dynamic mobile Web content. Popular handheld devices, such as iPhones and Androids, are being designed for mul-tiple networks. Demographics show younger adults continuing to favor wireless service over wireline service with about 32 percent of households now being wireless-only. Wireless com-munication is an everyday part of life in the United States. It is not going away, nor is it threatened to be replaced by any new modes of communication. We are quickly headed toward a day when a majority of people will only access the Internet via mobile devices, such as a smartphone or tablet.

Although subscriber penetration is completely saturated with a nearly 105 percent penetration rate, minutes of use remain high and data as a percentage of revenue has been growing by ap-proximately 20 percent at the two largest wireless operators during the past year.

Although the FCC does not have any new spectrum auctions scheduled that

the wireless world and potential new towers tenants, the past year has seen a shakeup of possible new tenants. Several companies with large spectrum positions or operating businesses are no longer vi-able future tenants — SpectrumCo and Cox Communications both have agreed to sell their respective AWS spectrum to Verizon, Open Range and LightSquared

local wireless operators have sold their operations to national carriers.

However, there are several prospec-tive new tenants to keep an eye on, including CenturyLink, which actively acquired 700-MHz spectrum in FCC Auctions 73 and 92; Dish Network, with its 40 megahertz of satellite spectrum and 6 megahertz of 700-MHz spectrum, could become a new wireless operator; and with the recent financial support of Sprint, a healthier Clearwire could become a more active operator looking to quickly expand its new LTE network. Despite the industry losing a few par-ticipants that were previously viewed as potential tower tenants, new and healthier participants have sprouted in their place.

Shared infrastructure will continue to evolve as it becomes the rule, rather than the exception, as carriers respond to consumer demands. Cell site build

being complemented more and more by alternative sites, such as femtocells, picocells and distributed antenna sys-tems. Backhaul demand, whether for

as wireless subscribers use mobile devices for increasingly data-intensive applications, such as mobile video streaming and data services, rather than

R. Clayton Funk is a managing director at Media Venture Partners. Jason Nicolay is

are [email protected] and [email protected].

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above ground level www.agl-mag.com74

tower market report

TAre you a tower owner or manager? If so, how many towers do you own

or manage?

AGL 2012 Tower Market Analysis and Survey

Tower(s) are located in what region, in general?

In addition to the regional distribution, 12% of respondents indicated that their tower operations have a nationwide presence.

By Jim Fryer

YES67%

NO33%

1 to 1058%

11 to 10025%

1,000 or more2%

501 to 1,0008%

101 to 2502%

251 to 5005%

Northeast32%

Southeast27%

Midwest29%

Southwest10%

Northwest2%

AGL subscribers (144 owners of towers of varying sizes and 71 service providers to the tower industry) collected in April and May 2012 using Zoomerang online surveys. Some open

cope in an environment of slowed growth, new technologies, increased government regulations, and new and challenging barriers to entry.

Question 1. Question 2. Question 3.

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July/August 2012 75

What’s the biggest challenge your tower will face in the coming year(s)?

Analysis: Carrier consolidation and a dearth of new entrants as long-term paying customers seems to be an underlying concern that stands in the way of growth in the year to come. Yet, this is still far from a dominant answer to the question. Given the diversity in inventory size of the respondents, the bigger tower companies tend to take the macro view (government intervention and consolidation).

Meanwhile, as you travel down the line to mom-and-pop tower companies, the concerns become more detailed (salt water, copper theft, financing, lease optimizers and physical main-tenance). Maintaining the structural integrity of the tower has long been the modus operandi of the smaller tower owner, many of whom hand-built the structures they own and operate, versus the “buy it and leave it alone” mentality of some larger tower aggregators.

The following are responses from individuals who took the survey, in no particular order.

Smaller tenants with no clue

Replacement

Keeping it structurally sound

Salt water

Remaining fully leased

Government regulation

Zoning

Maintenance. It’s 30 years old.

Structural integrity

Overcrowding and lack of space for revenue growth

Physical maintenance

Soaring energy costs

Finding a reasonably priced site

New business

Permitting new towers

Integration of new service(s) and as-sociated installation tasks

Capacity

Funding

Carrier budgets

Carrier consolidation

Finding paying carrier customers

More regulations dealing with wire-less providers and lease optimizations

also, no new technology coming out for more amendment work

Finding new carriers that will sur-vive the duopoly/triopoly as viable competitors

Excessive government regulations

Government requirement to evaluate every new antenna going on tower

Loading

Slowing growth of new sites

New tenants

Additional lessees

Tenants

Shrinking number of potential tenants

Mergers between cellular companies that will result in the loss of a carrier

Zoning regulations

G standard

Decrease in available tenants

Carrier consolidation and DAS

theft of copper

Paint

Consolidation and technology

Funding

Capacity

Growth

Cellular tenants

Finding additional renters

Loss of revenue from merging carriers

Corporate mergers

Overloading

Don’t really have any

New lease-up opportunities

Invoice issues and administration

Where to build

Advances in technology

Regulations

Carrier consolidation

Aging structure maintenance

supporting tower has considerable capacity and although we do have several good carriers, we are con-tinually trying to coax one or two to relocate. Not an easy sell, though.

Increasing interest rates

Getting new clients, keeping exist-ing clients, watching for the existing clients combining or adding without our knowledge

Getting approval for height increases

FASB rule changes on operating ver-sus capital leases, providing services and backup generation to clients, land and access improvements

Meeting the structural requirements for the new equipment

Question 4.

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above ground level www.agl-mag.com76

tower market report

Are you a member?Analysis: The groups posting the biggest gains over last

year’s survey are state wireless associations as they gain in popularity by offering more services and events that can focus on regional customers and issues. It’s not all golf tournaments and mixers as the associations are rolling up their sleeves to put forward and champion agendas that are favorable to the wireless industry at a state level and to host well-attended and informative seminars.

The more telling statistic is that 41 percent of respondents do not belong to any organization. Next year, we’ll have

of a small sampling of nonjoiners came up with the triad answer: (1) Dues are too high; (2) They don’t represent me as a tower owner (they’re more in the carrier’s pocket); and (3) I already know everyone I need to know — except the carriers, and they never show up.

Finding the small tower owner at the big trade show, a common occurrence in years past, is now a rarity. Tighter economics meant the end for many to traveling with the wife or partner to a “destination event,” seeing the same old faces peddling the same old products. How many more stress

balls do you really need, anyway? Here is a list of associations to which respondents

said they belong. The percentages add up to more than 100 percent because some respondents said they belong to two or more groups.

Some respondents said they belong to ARES/RACES, the

Title Association, and state broadcasting associations.

Question 5.

Question 6.

$1,00031%$1,501 – $2,000

36%

$1,001 – $1,50010%

$2,001 – $3,00015% Not applicable

8%

What is your average monthly rental rate for broadband?

CTIA – The Wireless Association 9%PCIA – The Wireless Infrastructure Association 20%National Association of Broadcasters 11%State wireless association 35%National Association of Tower Erectors 17%APCO 7%Rural Cellular Association 7%None of the above 41%

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July/August 2012 77

Analysis: It’s still an old-school windshield-tour-world for site acquisi-tion in the eyes of tower owners despite wonderfully advanced data products

still the perceived primary resource for

The role of the site acquisition

consultant has also grown since past surveys were conducted as carriers rely more and more on regional experts to

mine whether a new site can be built, and help navigate it all through the twin quagmires of zoning and lease negotiations.

Faith in their own websites, although

is still a perceived tenant-grabber, al-

have helped increase visibility for the smaller players contributing to building

that may have previously avoided join-

appearances.

Question 7.

Mostlikely 2 3 4 Moderately 6 7 8 Not at

all

Drive by 22% 30% 22% 19% 4% 4% 0% 0% 0%

Word of mouth 19% 33% 14% 10% 10% 5% 5% 5% 0%

Our website 0% 43% 21% 0% 0% 14% 21% 0% 0%

Their own internal resources/database 18% 9% 14% 18% 27% 9% 5% 0% 0%

Site acquisition consultant 30% 22% 22% 13% 4% 4% 4% 0% 0%

Media advertising 0% 0% 0% 11% 0% 22% 22% 22% 22%

Tower database (commercial) 24% 6% 0% 29% 6% 12% 12% 12% 0%

FCC database 48% 19% 15% 7% 7% 0% 0% 4% 0%

None of the above 20% 0% 10% 0% 0% 0% 0% 20% 50%

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above ground level www.agl-mag.com78

tower market report

tions and new development

public safety

tion capability in multiple bands

for 4G

areas

coverage

require one or more sites, directly to industrial users

ity), rural carrier expansion

outs

Where will additional growth come from (if at all)?

Analysis: The hope for new technol-ogy to grow revenue via 4G, LTE, DAS and wireless broadband is offset here by a gloomier no-growth view. Owners of

is in demand through local contacts, and create the growth themselves. The odd build-to-suit project falling in their laps

focus has shifted from dewy-eyed growth fantasies to maximizing revenues on ex-isting inventory either through increased

to tenants.According to the FCC, actual new

of 190 feet tall and higher) accounted for

precipitous drop from the 8,700 built in

ground level) shows a trend downward

infrastructure both in growth and height since the turn of the century. Carriers and their accompanying technological requirements dictated the shift to tree line-hugging sites, generally in the form of monopoles that not only delivered the goods but also created less visual impact and a smoother ride through zoning. By literally staying under the FCC/FAA radar with their height requirements, carriers

government intervention and the NIMBY

The overall number of new builds therefore is much larger than shown, yet it is unsubstantiated because it accounts for monopoles and sites shorter than the

CTIA-based cell-site growth numbers that inversely relate to tower growth numbers, loosely compiled industry growth num-bers from NATE and PCIA, and new build data from the publicly traded tower companies, the total number of new tow-ers built appears to be triple the number

The following are responses from

particular order. According to respon-dents, new growth will come from:

potential

Question 8.

NEW BUILDS/FCC Data File (towers 190 ft. and larger)

year total built avgheight

2000 8,730 221

2001 7,912 222

2002 4,538 219

2003 4,721 217

2004 5,147 220

2005 5,149 212

2006 5,708 200

2007 4,145 206

2008 4,321 215

2009 4,242 221

2010 4,540 208

2011 3,207 199

2012* 2,343 202

*(projected)

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July/August 2012 79

spectrum

some broadband

and state and local government instal-

support loads and have overall height

sibly new LPFMs

the increased capacity requirements

What is your most effective strategy in a zoning hearing?

Analysis: If a separate question were

prefer, a zoning hearing or root canal, there is little doubt what the choice would be. The dentist visit is less expensive and less painful in almost every case. Honesty seems to be the best policy when facing down the NIMBY hoard because there is no amount of sugarcoating that will turn a 200-foot structure into the community’s pride and

because of greed, but because it has to

at your side, solemnly nodding in agree-ment, during your presentation.

areas and we emphasize the need for communications services.

that as our main point, that the tower is necessary for our infrastructure.

the board. Give the board ample time

before the board.

to the meeting. We do only public safety towers.

capability reference)

property.

land planning testimony

based business.

issues

home phone is now the cell phone for 30 percent of us.

tions prior to the hearing and being ready to respond

ing to zoning to learn about potential adversaries and issues that can be addressed at that early stage.

all of their rules and regulations

Question 9.

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tower market report

disaster recovery clients

amount of impact to residential lots

necessary

crease

support from local authorities and

permitted use and give the jurisdiction space on structure.

bors. Pray a lot.

locations on existing structures, which eliminates some of the zoning issues.

Additional comments about the mar-

owners of small portfolios of towers

Carriers have more options than they

in rural areas. DAS is here, and along with small cell technology, DAS will affect future growth on towers in urban/suburban areas, both positively and negatively.

AGL provides essential information for

commercial and regulatory factors are fully covered.

are occupying most of our time, which

ing efforts.

used (for pricing anchor tenants) is grossly out of date and will ultimately fail because it is still based on there being four to seven carriers that will use a site. If the strong carriers truly want capital infrastructure partners, they must adjust their reality of what an anchor BTS should pay for a site so

new tower companies will fail, based on their current terms and pricing.

because too many critical services depend upon cellular service, which

revenue lost after the collapse of the paging industry, but wireless upgrades

the difference.

ments very low-cost space for remote receivers, for their wide-area systems. Established relationships grow over time.

nology gets smaller. It is tough for small independents because the big guys have things under control.

on new customers and how to service the existing customers with consolida-

for new sites, between extreme govern-ment interference and residents who

permit for a third tower in between two existing towers.

Question 10.

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July/August 2012 81

As a service provider to the tower industry, are you anticipating growth in your business from that sector?

Analysis: Service providers have been optimistic, and increasingly so, compared with previous surveys. And

inward on developing existing site infrastructure, capacity and utility over new growth, the service sector not only lives on but also thrives. Increased government legislation concerning new and existing sites has helped bring new service providers to the fore as well.

services, site maintenance companies,

relatively stagnant growth but a high level of activity.

duce revenue

to 4G. All site development disciplines are experiencing growth based on these

possibilities and same for next year.

clients.

Question 11.

Question 12.

Yes74%

No26%

As a service provider, what is the big-gest issue that may affect the growth of the tower industry in the coming years?

spectrum

what I have seen, maintenance is a low priority, especially on government-owned towers.

higher and the question of how carriers

are deployed. Do they go with micro sites/DAS, or will they continue to rely

and tower siting, including access road

capital for infrastructure; siting and zoning issues

property

sue of continual consolidation of tower owners and service providers.

drastically slowed due to the upgrade projects. The wireless carriers are cur-rently deploying their capex dollars to these upgrades as opposed to new site development.

micro solutions to improve wireless coverage

government’s anti-business climate

elevation sites

riers change the landscape of smaller service providers. They want to sign nationwide or turf agreements, and then one vendor gets the majority of

auctions

nology (lightRadio cube-type tech-nology)

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tower market report

above ground level www.agl-mag.com82

tower market report

Jim Fryer is on the board of the Pennsylva-nia Wireless Association and is president of Fryer Marketing & Media, a tower mar-ket consulting firm. His email address is [email protected].

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____________________________

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above ground level www.agl-mag.com84

product showcase — site security systems and equipment

Perimeter Intrusion Detection Smarter Security has launched SmarterBeam CLR500+, the latest model in its line of passive infrared motion detectors. The unit improves upon the company’s current long-range detector by increasing the detection area near the unit’s mounting. It also features three alarm outputs to enhance alarm

which are divided at distances of 60 and 165 feet with three distinct alarm

area. This improves the speed and effectiveness of response by more ac-curately identifying the breach area. www.smartersecurity.com

Site MonitoringPageTek has introduced the ProTek jr+ IP to meet the remote site monitoring needs of cell sites. This monitor provides all the monitoring capabilities of the company’s standard units, but adds IP to enhance alerting options. IP capabilities include TCP Messaging to a computer or to the PageTek SiteManager and SNPP Messaging, which allows paging over the Internet and SMTP messaging to send alerts as email. The modem option is still available allowing all forms of digital and voice paging.www.pagetek.net

Video Security is a cost-effective wireless video

security system that needs no AC power or Internet or phone lines. Outdoor cameras secure electrical infrastructure, rooftop air conditioners, cables, and building materials. Indoor cameras secure copper plumbing and wiring. The copper theft kit is a video security system designed to apprehend the perpetrators. Motion activates the integrated night vision camera and sends a 10-second video of the intruder over the cell network to the monitoring station and the site manager. Features include up to 24 cameras on a single system, which operates for months on one set of batteries, and indoor and outdoor cameras. Accessories include HID iClass contactless card arming/disarming station, outdoor siren/strobe and key fob arming device.

Site Monitoring ITL Network Operations Control Center, iNOCC, based in Nashville, Tenn., provides around-the-clock tower

-port of a broad range of tower lighting systems. ITL provides technical support staff experienced with all major tower lighting systems, automatic daily email reports of site portfolio status, com-

maintaining of NOTAMs with the FAA,

NOTAMs with history, marker/sidelight alarms and sites with no alarms, exten-sive logging and reporting of historical data, remote control and diagnostics of tower lighting systems.www.itl-llc.com

Tamper-resistant NutsSpiNut from SSC is a lock-ing device for industrial-level hardware bolting systems, which makes a tower site tamper-resistant. The nut, with spin collar and matching

-

secure database catalogs each proprietary design. A SpiNut

the U.S. Department of Home-land Security for increasing risk prevention.www.selectivesite.com

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_____________

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July/August 2012 85

Site MonitorThe DM-900 site monitor from Hark Systems has eight

www.harksys.com

Busbar Theft DeterrentMi-Jack Systems and

Technology

www.mjst.com

Remote MonitoringThe TASC Systems

www.tascsystems.com

Site Access ManagementMi-Jack Systems and

Technology

www.mjst.com

Gate Locking TechnologyMi-Jack Systems and Technology that

www.mjst.com

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__________

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above ground level www.agl-mag.com86

advertisers index

AGL .....................................................................86AGL Regional Conferences .................................72Anritsu .................................................................33APCO ..................................................................43ASCE ...................................................................39AT&T ......................................................................9BB&T– Atlantic Risk Management ......................25Black & Veatch ....................................................57Canine Companions ............................................83Clearfi eld .............................................................63Dynamic Environmental Associates ....................16Electro Wire .........................................................58Engineered Endeavors ........................................71FieldSense.............................................................5FWT .....................................................................41Hughey and Phillips .............................................59ITL .......................................................................19My-te Products ....................................................36National Association of Tower Erectors ........................................................................ inside back coverNello ....................................................................36Pennsylvania Wireless Association .....................19

PQ Shelters ........................................................29Radio Waves .........................................................7Raycap ................................................................17Reliant Shelters ...................................................86Rural Cellular Association ............................. 11–14Sabre Industries ..................................................10SBA Communications ............................ back coverSlatercom ............................................................73Specialty Tower Lighting ......................................71Spectracom .........................................................41SSC .....................................................................32Telewave ..................................... inside front coverTimes Microwave Systems .................................53TWR ....................................................................37U.S. Department of Agriculture ............................61U.S. Department of Transportation ......................21Utility Service Communications ..........................35Waterford Consultants .........................................82Weatherex ...........................................................86Wireless Towers ..................................................86Women’s Wireless Leadership Forum ................62

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professional directory

Put the power of AGL to work for you with a professional card ad.Call Mercy Contreras at (303) 988-3515. [email protected]

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Our clients depend on SBA to provide the wireless infrastructure that allows them to transmit the signal to their customers. As their first choice provider of wireless infrastructure solutions, we are continuously setting the standard for customer satisfaction by “Building Better Wireless.”

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